Closing Update: Fed's Dudley, Plosser Comments Pull Stocks Off All-Time Highs
Stocks retreated from new record highs for the Dow Industrials and S&P 500 after a Federal Reserve official known for his hawkish views endorsed an end to the central bank's quantitative easing. The head of the New York Fed perhaps unintentionally also fueled the afternoon selloff, saying he's seeing signs of an improving U.S. economy - re-igniting worries among investors the Fed could soon shut down its stimulus programs. Late market chatter also centered on comments from activist investor Carl Icahn who, at a Reuters event, reportedly expressed concern for stock level sustainability.
Philadelphia Fed President Charles Plosser told a Risk Management Association audience today that he expects the central bank will begin to taper its bond-buying program yet this year in anticipation of the economy reaching a 3% growth rate and 6.25% jobless rate by the end of next year. He also said the Fed should clearly detail its future bond purchases and then quit when that target is reached.
Plosser currently is not a voting member on the Federal Open Markets but will re-join the policy-setting panel in January.
And while Plosser hawkish view were not unexpected, New York Fed President William Dudley - a permanent FOMC member - surprised Wall Street with comments today he was "getting more hopeful" for the U.S. economy, pointing to better-than-expected hiring last month and improved Gross Domestic Product during the latest quarter.
Despite the rosy assessment, however, Dudley said he expects the Fed will maintain a "very accommodative" monetary policy "for a considerable period of time."
Earlier, the Dow Industrials pushed above 16,000 for the first time, led by gains for Boeing ( BA ) and financial stocks, while Abercrombie & Fitch ( ANF ) and Tyson ( TSN ) helped advance the S&P 500 past 1,800.
It was a light day for economic data, with the National Association of Home Builders today saying its housing market index declined a single point to a 54 reading in November, trailing market consensus expecting the industry group's housing gauge to remain unchanged from the prior month at 55.
Commodities ended lower, providing considerable drag on equities. Crude oil for December delivery settled 81 cents lower at 93.03 a barrel while November natural gas slid 4 cents to finish at $3.61 per 1 million BTU. December gold fell $15.10 to $1272.40 per ounce while December silver fell $0.39 to $20.35 per ounce. December copper fell 2 cents to $3.15 per pound.
Here's where the markets stood at end-of -day:
Dow Jones Industrial Average up 14.32 (+0.09%) to 15,976.02
S&P 500 down 6.65 (-0.37%) to 1,791.53
Nasdaq Composite Index down 36.90 (-0.93%) to 3,949.07
Hang Seng Index up 2.73%
Shanghai China Composite Index up 2.87%
FTSE 100 Index up 0.45%
(+) CXM, Cell-nique Corporation has acquired CXM's To Go Brands assets for approximately $2.5 million through an exchange of a preferred equity position in Healthy Brands.
(+) CEMP, The company's drug solithromycin (CEM-101) may provide an effective antimicrobial approach for the prevention and treatment of intrauterine infections during pregnancy.
(+) DHRM, Dehaier Medical won a $918,000 medical equipment procurement contract in China.
(-) MZOR, The company reported a non-GAAP loss of $3.1 million, or $0.09 per share, compared to break even in Q3 2012. Revenues were $3.1 million compared to $4.1 million in the same period last year.
(-) FB, Social-networking stocks are lower on Walter Isaacson's comment on CNBC about a bubble within the sector