By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks declined on Wednesday
after Federal Reserve Chairwoman Janet Yellen said that rate hikes
would happen after about six month from the time tapering bond
purchases is finished.
Yellen fielded questions from the press following the Fed policy
announcement. in her first news conference as the Fed chairwoman,
succeeding Ben Bernanke. The FOMC decided to trim the bond
purchases by another $10 billion this month and changed the way it
targets unemployment and inflation in deciding short-term interest
rates.
The Fed said it would now consider a "wide range" of factors
instead of relying mainly on the unemployment rate. The Fed
statement also stressed that the bank could keep short-term rates
below what is viewed as "normal" even if employment levels and
inflation hit its targets.
The S&P 500 (SPX) fell 14 points, or 0.8%, to 1,857.25 after
the announcement. The Dow Jones Industrial Average (DJI) dropped
131 points, or 0.8%, to 16,207.45.
The Nasdaq Composite (RIXF) shed 36 points, or 0.8%, to
4,29.29.
Follow our stock market coverage on live blog.
See also: Live blog and video of the Fed decision and the Janet
Yellen news conference.
"Things where down, but not a lot until Yellen dropped the bomb
that QE would be done by this fall. Of course, with five meetings
to go and $10-$15 billion taper per meeting, that brings us right
to October. Still, this comment caught many traders off guard and
provided some afternoon fireworks to the downside," said Ryan
Detrick, senior technical strategist at Schaeffer's Investment
Research.
"We think it is premature to think about the rate hikes at this
point, as there will be many data points between the time bond
purchases are done and economy is healthy enough," said Jim
Russell, senior equity strategist at U.S. Bank Wealth
Management.
Yields on 10-year Treasurys surged, gold prices fell further and
the dollar spiked against the Yen after the Fed announcement.
Earlier, a batch of mixed earnings did little to influence
cautious sentiment.
Among individual stocks, shares in KB Home (KBH) jumped 5.6%
after the home maker swung to profit in its fiscal first quarter,
beating analysts estimates.
Shares of Oracle Corp. (ORCL) fell 0.9% after the
business-software group's adjusted profit and revenue growth wasn't
as strong as analysts had forecast.
FedEx Corp. (FDX) was little changed following the release of
its fiscal third-quarter earnings that fell short of Wall Street's
expectations. FedEx said severe winter weather dragged down its
earnings for the quarter ended Feb. 28.
General Mills Inc. (GIS) shares were 0.1% lower after the food
company reported quarterly profit mostly in line with
expectations.
In overseas markets, Asia had a mixed day, with the Nikkei 225
giving up a more than 1.2% gain at one point to close up just 0.4%,
while Chinese stocks went nowhere. European markets slipped, while
the FTSE 100 index rose after the release of minutes from the
latest Bank of England Monetary Policy meeting and the latest jobs
data. (GBPUSD)
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