U.S. stocks fall after Fed comments

Yahoo (Reuters) ^ | Wednesday January 28, 2:27 pm ET | Reuters staff

[The_Victor]

(Updates with Fed comments)

NEW YORK, Jan 28 (Reuters) - Stocks fell on Wednesday after the Federal Reserve, as widely anticipated, said it will leave interest rates unchanged at 45-year lows, but made comments that indicated it might be closer to a rate hike.

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The U.S. Federal Reserve opted on Wednesday to hold interest rates at 1958 lows to keep the economic recovery rolling. But it changed its wording on the future of rates slightly to say it can "be patient" before lifting borrowing costs.

Low rates are good news for stock prices and the economy, since they help fuel corporate earnings growth by keeping a lid on borrowing costs.

After the Fed's comments, the Dow Jones industrial average (^DJI - News) fell 66 points, or 0.62 percent, to 10,544. The Standard & Poor's 500 Index (CBOE:^SPX - News) was down 7 points, or 0.62 percent, at 1,137. The technology-laced Nasdaq Composite Index (NasdaqSC:^IXIC - News) dropped 17 points, or 0.80 percent, to 2,099.

[LurkingSince'98]

Are you fromn the Middle East, I didn't know the Shites could carry mortgages.

All kidding aside, have you considered selling them.

For what I see coming it's not a good place to be.

Regards,
Lurking'

[Bobby777]

the Fed should be put under the Executive and/or Legislative branches of the U.S. Gov't and taken out of the position it is in now ...

[holdmuhbeer]

Wall Street is full of idiots. They act on emotions much more than rational. How can someone react in such crazy and irrational fashion based on "remain to be patient" statement from the Feds. The fact remains that the Feds have kept the interest rate at the lowest level in 46 years but Wall Street is hanging up on one meaningless statement. I just cannot believe this, what do these morons in Wall Street want to hear....

just ignore the hype, i do. i'm in the market for the long run. the children can buy,sell,buy,sell all they want and probably lose money. hardly anybody makes money daytrading so just ignore all the talking heads because they are all idiots.

[CasearianDaoist]

Don't you think that 1) they have to give OPEC some sort of (public) signal that this will happen sooner or later this year (can't have them pricing in Euros or a mixed basket) and 2) It gives the US a little more negotiating room in the upcoming G7 finance meeting.

[wardaddy]

I develop commercial real estate. I'm not a mortgage trader.

[LN2Campy]

With the economy coming back, rates need to increase to avoid malinvestment. Also, our trade and budget deficits require A LOT of foreign capital, and without better rates the money will simply not flow here, which is already hurting the dollar.

The inevitable little correction to the RE market wouldn't be the worst thing in the world, either.

[expat_panama]

see the DJIA bottom out around 9800 over the next few weeks.

Anyone else?

[SquirrelKing]

Don't you think that 1) they have to give OPEC some sort of (public) signal that this will happen sooner or later this year (can't have them pricing in Euros or a mixed basket) and 2) It gives the US a little more negotiating room in the upcoming G7 finance meeting

Yeah, thinking globally, that makes sense. I'm hardwired for local stuff but in terms of G7 it seems to give us a slightly better hand.

[RightWhale]

If the market is reading Greenspan's thoughts to this extent, we might be in a precarious economic situation. When the economy is clearly strong or weak, it doesn't matter much what he says or does.

[Fyscat]

Just a couple quick points on todays turnaround....


Based on changes in the Wilshire, the total value of U.S. stocks retreated by $192.6 billion today alone...

Nasdog Loses 1.8% for largest decline since Dec. 9th

Dow pares it's advance for the year to 0.1% Dow and S&P500 had their biggest declines since 10-22

Canadian dollar slides after Fed statement; U.S. mortgage bonds sink. US muni money mkt funds see $611 mln wkly outflows

Welcome to the "Hotel California"

Meanwhile, Ameritrades quote provider went down, it also brought down ETrade and Scwhab.

If it was due to poor infrastructure to handle the volume, people will sue to recover damages.

The major online trading sites ALL go down in unison during a market collapse, leaving their customers unable to trade during the breakdown of the S&P 500. Just take a wild guess how much the market would have been down if retail investors had been allowed to trade!

If these systems were not equipped to handle today's volume, imagine how they'll respond in a REAL MELTDOWN. Anybody who is playing the long side needs to remember what happened here today. In the event of an emergency, the exits are totally closed.

"You can check out any time you like...but you can never leave!"

[RetiredArmy]

Greenspan opens trap, market plunges 142 points. Shutup!

[expat_panama]

Just a couple quick points on todays turnaround....

And the points are very convincing. As for me I took a profit with Scottrade at 2 minutes before closing bell without a problem (-- it would've been nicer if I'd sold yesterday, but hey- nobody ever went broke taking a profit.)

But if we decide there was so much panic selling today, we still have to explain the closing uptick with increasing volume...

[RWR8189]

I heard on some business show today that the change in wording may be due to the fed having already seen the advance Q4 GDP numbers and it is much higher than expected.

Would this make sense to someone who is more business savvy than I?

[henderson field]

You are assuming that the reason for housing growth is low interest rates. They have a marginal effect. You will get your bargain-priced house when immigration is stopped and they begin sending the foreign-born back where they came from - not before, so don't hold your breath.

[Frank_2001]

So do I!;)))

[John O]

The reality is he won't hike rates until (John Snow or) GWB (says he's concerned about the weak dollar) is safely re-elected.

I know next to nothing about the market (I'm learning by reading here) but I do know how to strikeout.

The reality is he won't hike rates until John Snow or GWB says he's concerned about the weak dollar is safely elected

Use < strike > to start the strikeout and < /strike > to end it. Of course remove the spaces between the < > and the characters inside them.

[bvw]

That is a very interesting comment.

[mware]

What worries me is the, "Soro's factor"

That guys has enough money invested that he could start a stockmarket dive.

Done at the right time, say a few months before an election, it could effect the economy bigtime.

[Moonman62]

Well, I think his specialty is foreign currency exchange. He could attack the dollar to make it weaker. If he tries that, though, GWB can threaten intervention to support the dollar, and I'm pretty sure Japan would help, and maybe even the EU and China.

[ampat]

Don't listen to financial analysts for the short term. They are wrong most of the time. Just read the daily explanations for the movement of the stock market. It's mostly made up of financial news that's not significant. It's laughable.

To show an hourly chart of the market, and claim doom and gloom is irresponsible. It would be easy to find such a chart in any bull market. With the advent of cable news, financial reporters are having to scrape the barrel to fill the available time with information. As a result, there are as many opinions as people.

Do your own analysis, and don't put too much weight in company reports. They are written because it's the law. Report writers can spin witht the best of them. Learn about technical analysis (charts, indicators); it reflects the total market, including the mob psychology, and you can see both the long and short term views, and the historical as well. But don't take my word for it. Do your own due diligence.