Fed taper anxiety triggers profit taking on Wall Street
Friday, 13 December 2013 00:47
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Reuters: Stocks posted their largest drop in a month on Wednesday as traders locked in recent gains after a provisional budget deal out of Washington removed one of the near-term reasons for the Fed to keep up its current pace of economic stimulus.
Last September, the Fed cited the possibility of a hit to the economy if lawmakers didn’t agree on a budget as one reason to maintain its $85-billion-a-month bond-buying program.
The bipartisan budget agreement reached late Tuesday would end three years of political confrontations and fiscal instability in Washington that climaxed in October with a partial government shutdown. A vote in the US House of Representatives could come as soon as Thursday.
The Fed’s stimulus has been instrumental in a rally that has put the S&P 500 on track to close its strongest year in more than a decade.
The Dow Jones industrial average fell 129.60 points or 0.81%, to end at 15,843.53. The S&P 500 slid 20.40 points or 1.13%, to close at 1,782.22. The Nasdaq Composite dropped 56.677 points or 1.4%, to finish at 4,003.813.
The 25% rally in the S&P 500 so far this year served as a reason for traders to sell some equities and lock in gains. The benchmark index slid throughout the day.
