U.S. stocks sink after Fed paints grim outlook
NEW YORK — US stocks fell sharply Wednesday after the Federal Reserve’s “Beige Book” portrayed a still-weak economy in September, as big losses from tech stars Apple and Amazon pulled the Nasdaq down more than 2.0 percent.
Reports of ongoing discord over the coming comprehensive rescue plan for the eurozone also helped push shares lower, analysts said.
The Dow Jones Industrial Average lost 72.43 points (0.63 percent) to close at 11,504.62.
The broader S&P 500 shed 15.50 points (1.26 percent) to 1,209.88, while the tech-heavy Nasdaq Composite sank 53.39 points (2.01 percent) to end at 2,604.04.
The Nasdaq was down from the beginning of the session, but the other indices mostly stayed positive until the last two hours.
“Momentum from the prior session’s broad-based bounce was lost this morning as reports regarding plans to boost bailout funds in the EFSF (European Financial Stability Facility) were contradicted,” said Briefing.com.
“Headlines indicative of conflicting goings on at meetings between eurozone officials played a part in an afternoon sell-off that left stocks to end the session at lows.”
Also souring sentiment was the Beige Book September report, which compiles assessments of the economy from the central bank’s 12 regions.
While there was still growth in all the areas, “many districts described the pace of growth as ‘modest’ or ‘slight,’” the report said.
The report said business contacts “generally noted weaker or less certain outlooks for business conditions.”
The Nasdaq was dragged down by Apple, which fell 5.6 percent after its quarterly report fell below expectations, and Amazon, which lost 5.1 percent.
Abbott Laboratories shares rose 1.5 percent after the company said it would split into two companies, one for its pharmaceutical research and branded drugs, and another for the rest of its medical products, drugs, and infant formula.
Bond prices fell slightly. The yield on the 10-year Treasury rose to 2.16 percent from 2.15 percent late Tuesday, while that on the 30-year Treasury climbed to 3.17 percent from 3.16 percent.
Bond yields and prices move in opposite directions.