Dow sinks for sixth day as traders ponder Fed exit
Source: AP-Excite
By KEN SWEET
NEW YORK (AP) - Stocks fell sharply Wednesday after the Federal Reserve disclosed that its top officials were mostly in agreement that the central bank should end its massive bond-buying program.
The Dow Jones industrial average fell 105 points. It was the index's sixth straight decline, the longest losing streak since July 2012.
In the minutes from Fed's July policy meeting, board members said it "might soon be time" to slow the purchases. The bond-buying program has been in place in one form or another since late 2008 to keep interest rates low and encourage economic growth.
Traders have been worried about weak earnings and have been looking for clarity on how and when the Fed will wind down its bond purchases. Some investors believe the Fed's bond-buying has inflated stock prices.
FULL story at link.
Read more: http://apnews.excite.com/article/20130821/DA8AJ3F00.html
BlueStreak
(8,377 posts)The markets always over-react. Both directions. That's how the easy money is made, betting on the space between the pendulum swings.
But we've had a huge run up, and a lot of stocks are seriously over-valued now, so there is a lot more downside possible. It has nothing to do with the tapering plan, but that's what the talking heads will all say.
The correction -- and the end of the Fed QE program -- is good for the stability of our economy.
Fearless
(18,421 posts)Some?
dtom67
(634 posts)There is no way they will stop. A Ponzi scheme needs ever - increasing amounts of cash coming in at the bottom to keep a collapse from happening. Who will buy our debt at near - zero rates?
That being said, if there was to be an exit, it would make sense to do it right before Big Ben quits. That way the next guy will not have to worry about political pressures.