Stocks Stumble After Fed News of Rising Interest Rates
(NEW YORK) -- The Dow Jones Industrial Average finished with a triple-digit loss Wednesday as investors reacted to the suggestion by Federal Reserve Chair Janet Yellen in her first news conference that interest rates could rise earlier than the market has been expecting.
The Dow Jones Industrial Average did bounce off its worst levels of the day, but still finished 114 points lower at 16,222.17. The Nasdaq Composite finished the day down 26 points at 4,307.60. The S&P 500 closed 11 points lower at 1,860.77.
When Fed Chair Yellen said that interest rate hikes could start "about six months" after the bond-buying stimulus program ends later this year, stocks started tumbling. Her comment suggests that rates could start rising in the first half of next year. Traders had expected the Fed to start hiking rates late next year at the earliest.
As expected, the Fed trimmed its bond buying stimulus program an additional $10 billion this month from $65 billion to $55 billion. The Fed also said in its statement that it expects the economy to grow at a steady if modest pace in 2014 despite weather-related setbacks this winter.
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