| | | General market comment
Stocks Plunge With Nasdaq at 14-Month Low, Dow Hitting Worst Level of Year After Fed Hikes Rate
MT NEWSWIRES 4:15 PM ET 12/19/2018
04:15 PM EST, 12/19/2018 (MT Newswires) -- Equities plunged on Wednesday, giving back earlier gains as the Federal Reserve raised the target range on its benchmark rate for the fourth time in 2018 and signaled more hikes to come, albeit fewer than previously seen.
The Dow Jones Industrial Average plunged to the lowest close yet this year, while the Standard & Poor's 500 saw all 11 of its sectors sink and the Nasdaq Composite hit the worst level since October 2017 as tech sank.
The Federal Open Market Committee hiked the federal funds rate by 25 basis points while lowering its view for 2019 growth and projecting two 25 basis-point rate hikes for next year, down from three seen in September. Chairman Jerome Powell said political considerations played no role in decision making after President Trump urged the Fed to stop raising rates.
Goldman Sachs said the Fed's accompanying materials "were somewhat surprising and on net not nearly as dovish as we had expected," while adding that the FOMC "did not soften its stance on policy or the outlook in the statement."
But Stifel Economics said the Fed "appears to be going into the new year eyes wide open, aware of at least some growing risks or early signs of waning moment which is likely to translate into a markedly reduced pace of policy adjustments."
Markets had been solidly higher ahead of the rate decision and turned quickly lower after the statement was issued. The S&P's losses were led by a 2% decline in consumer discretionary and a 1.6% decrease in information technology. On the Dow, almost all of the 30 components were in the red, with just Verizon(VZ) hanging on for a slim gain of 0.3%. Intel(INTC) shed 4.7% in the steepest loss while Nike(NKE) retreated 3.4% ahead of its results due Thursday.
In company news, Jabil Circuit (JBL) was up 7% after reporting better-than-expected first-quarter core earnings and revenue late Tuesday. Facebook(FB) shed 7.3% after disputing a New York Times report saying it provided other tech firms and advertisers with access to users' personal data.
By the close, the Nasdaq was down 2.2% while the Dow and the S&P 500 were both 1.5% weaker. |
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