In the past week all three major indexes lost at least 1 percent.
Richard Drew • Associated Press,
Economy, stimulus worries dash stocks
- Article by: MATTHEW CRAFT
- Associated Press
- June 14, 2013 - 7:17 PM
NEW YORK – Disappointing reports about the U.S. economy helped push the stock market lower on Friday.
Concerns that the Federal Reserve could announce next week that it plans to cut back its stimulus program also weighed on the mood.
Americans’ confidence in the economy was lower than economists had estimated, according to the Thomson Reuters/University of Michigan survey out Friday. Another report said factories weren’t as busy as expected.
The International Monetary Fund (IMF), a global lender, offered no help. It said Friday that U.S. government spending cuts that kicked in March 1 were “ill-designed” and slowed the economy.
The Standard & Poor’s 500 index sank 9.63 points, or 0.6 percent, to 1,626.73. Media company Gannett fell the most, dropping $1.61, or 6 percent, to $24.99.
The Dow Jones industrial dropped 105.90 points, or 0.7 percent, to 15,070.18. American Express led the Dow lower, losing $2.24, or 3 percent, to $72.97.
Trading has been volatile since late May as traders try to figure out when the Fed will dial back its aggressive support for the U.S. economy. This week was no different: The Dow slumped a total of 243 points on Tuesday and Wednesday, then jumped 180 points Thursday. The blue-chip average has made moves of 100 points or more in seven of the past 10 trading days.
The Fed buys $85 billion in bonds every month as part of a campaign to keep interest rates extremely low. The aim is to encourage borrowing, spending and investing. Some investors worry that long-term interest rates could spike when the Fed pulls back, raising borrowing costs and threatening the economic recovery.
Policymakers at the Fed will start a two-day meeting Tuesday to discuss the central bank’s next steps. After the meeting wraps up, the bank will release its policy statement and Fed Chairman Ben Bernanke will hold another news conference.
Scott King, senior fiduciary investment adviser at Unified Trust in Lexington, Ky., said investors were disappointed Friday by the drop in consumer confidence. He described the economy as “plodding along.”
In other Friday trading, the Nasdaq composite index lost 21.81 points, or 0.6 percent, to 3,423.56.
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