Deterioration of Investor Sentiment Amid Fed's Ambiguous Stimulus Intent
Notable Weakness in Tech Stocks Including Apple and Tesla
[Asia Economy New York=Correspondent Baek Jong-min] The disappointment left by the U.S. central bank, the Federal Reserve (Fed), continued for the second day. On the 17th (local time), the New York stock market failed to avoid sluggishness, and gold prices fell by more than 1%.
On the 17th (local time) in the New York stock market, the Dow Jones Industrial Average fell by 130.40 points (0.47%) to close at 27,901.98, the S&P 500 index dropped by 28.48 points (0.84%) to 3,357.01, and the Nasdaq index declined by 140.19 points (1.27%) to 10,910.28.
December delivery gold closed at $1,949.90 per ounce, down 1.1% ($20.60) from the previous day.
Although the Fed announced the day before that it would maintain zero interest rates until 2013, it did not present specific action plans regarding the expansion of asset purchases or the introduction of an average inflation targeting system, which unsettled the market. While the Fed stated it still has many tools, the dissatisfaction over not taking decisive action tightened investor sentiment.
The economic indicators released that day also triggered concerns. The U.S. Department of Labor announced that the number of initial jobless claims last week decreased by 33,000 to 860,000. Although this was better than the Dow Jones consensus estimate of 875,000, it clearly indicated a slowdown in the pace of employment recovery.
Among individual stocks that day, Apple shares fell 1.6%, Facebook shares dropped 3.3%, leading the tech stocks' market weakness. Tesla fell more than 4.1%. Snowflake, which surged 111% after its IPO the day before, declined 9.6%. Nikola, embroiled in fraud allegations, rose slightly for the second consecutive day, showing signs of recovery from its worst phase.
International oil prices rose sharply, supported by the confirmation of the importance of production cuts at the OPEC+ meeting. October delivery West Texas Intermediate (WTI) crude oil closed at $40.97 per barrel, up 2% ($0.81).
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