Wall St Slides after Fed Raises Rates; Energy Weighs

تم نشره في Wed 14 December / Dec 2016. 01:00 AM
  • A trader on floor of the New York Stock Exchange (NYSE) shortly before the close of trading in New York, U.S., December 13, 2016. - (REUTERS)

NEW YORK — US stocks fell the most in two months on Wednesday after the Federal Reserve raised interest rates by a quarter point and signalled hikes could come next year at a faster pace than some expected.

Energy stocks weighed the most on the S&P 500 after a sharp drop in US crude oil prices.

The Fed's decision to raise rates comes as President-elect Donald Trump, who will be sworn in next month, is seen cutting taxes and increasing spending on infrastructure.

Fed Chair Janet Yellen indicated the central bank was, at the margins, adapting to Trump, as some committee members began shifting fiscal policy assumptions to slightly faster growth and lower unemployment.

Stocks sold off during Yellen's press conference after the Fed statement. She walked back from recent comments that hinted the Fed could allow the economy to run hot for a certain time, meaning inflation could slightly overshoot and unemployment could remain low before the Fed felt the need to tighten policy faster.

Markets had all but priced in a rate increase by the Fed, but the faster pace of increases seen next year may give traders an excuse to cash-in the recent gains.

Since the Nov. 8 US presidential election, stocks have rallied on bets that Trump's expected business-friendly policies will stimulate the economy. However, some market participants are concerned that equities are pricing in a very favourable scenario, leaving them vulnerable.

The Dow Jones industrial average fell 118.68 points, or 0.6 per cent, to 19,792.53, the S&P 500 lost 18.44 points, or 0.81 per cent, to 2,253.28 and the Nasdaq Composite dropped 27.16 points, or 0.5 per cent, to 5,436.67.

US crude prices fell nearly 4 per cent, the most since mid-July, on renewed concerns about an oil glut sparked by rising US crude inventories in storage.

The US dollar strengthened across the board, its index hitting the highest level in nearly 14 years, further weighing on oil and other commodities priced in the US currency.

Exxon Mobil declined 2.2 per cent and was the largest drag on the S&P 500.

About 8.49 billion shares changed hands in US exchanges, above the 7.3 billion daily average over the last 20 sessions.

Declining issues outnumbered advancing ones on the NYSE by a 4.12-to-1 ratio; on Nasdaq, a 2.74-to-1 ratio favored decliners.

The S&P 500 posted 30 new 52-week highs and 1 new low; the Nasdaq Composite recorded 110 new highs and 51 new lows.