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S&P 500 Posts Biggest Drop Since 2011 on Fed Concerns



The sentiment hit is significant. Higher yielding assets and currencies are taking a hit now as investors worry about the implications of any tapering of quantitative easing. Continue to monitor the S&P 500 for clues to sentiments. Good reading from Bloomberg.

U.S. stocks fell, giving the Standard & Poor’s 500 Index its biggest decline since 2011, as global equities tumbled after the Federal Reserve said it may phase out stimulus and China ’s cash crunch worsened. All 10 groups in the S&P 500 declined at least 2 percent, as consumer and utility shares led losses. The S&P 500 sank 2.5 percent to 1,588.19 at 4 p.m. in New York , for its biggest one-day drop since November 2011. The benchmark index lost 3.9 percent over two days. The Dow Jones Industrial Average erased 353.95 points, or 2.3 percent, to 14,758.24. Trading of S&P 500 companies was 41 percent higher than the 30-day average. “It’s been so violent that it puts people on the sidelines,” James Paulsen , the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees more than $340 billion, said by telephone. “The buyers are saying ‘I’m going to wait and see.’ They’re not running to the exits but they’re also not willing to catch a falling knife.” The MSCI All-Country World Index slipped 3.4 percent today, the most in 19 months, as Asian stocks tumbled 4.1 percent and European shares retreated 3 percent, the biggest losses for both regions since 2011. China’s benchmark money-market rates climbed to records as the central bank refrained from using reverse-repurchase agreements to address a cash crunch in the world’s second-biggest economy. The U.S. 30-year bond yield climbed above 3.5 percent for the first time since September 2011. The dollar strengthened against 15 of its 16 major peers. Bond Purchases The S&P 500 yesterday fell the most this month after Fed Chairman Ben S. Bernanke said the central bank may end bond purchases by the middle of next year if the U.S. economy improves in line with Fed projections. His speech […]

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