Stocks finished sharply in the red on Wednesday after an ugly last hour of trade saw the averages go from roughly unchanged to lows of the day. The big event on Wednesday was the Fed’s latest monetary policy statement, that saw the Fed largely keep its statement in tact from the December meeting. Markets were little changed after the Fed, but gave it up into the close as stocks had their second tough day in a row.
First, the scoreboard:
- Dow: 17,191.4, -195.9, (-1.1%)
- S&P 500: 2,002.2, -27.4, (-1.4%)
- Nasdaq: 4,638, -43.5, (-0.9%)
And now the, top stories on Wednesday:
1. The Fed will remain patient. In the Fed’s latest monetary policy statement the Fed said that it would still be “patient” in looking to raise interest rates, adding that the economy still continues to expand at a “solid pace” as labour market conditions continue to improve. The Fed did acknowledge, however, that inflation expectations have fallen “substantially” and that “international” developments bear monitoring, giving the statement what could be seen as a dovish tilt, which was not accompanied by a press conference from Chair Yellen.
2. Also in central bank news, the Royal Bank of New Zealand kept rates unchanged, and said that the value of the kiwi dollar remains “unjustified,” which sent the kiwi tumbling to a three-year low against the US dollar.
3. Crude oil got slammed again, falling more than 4% to as low as $US44.20 a barrel as oil still cannot find a bottom. Data from the EIA on Wednesday showed that oil inventories are at their highest level in “at least 80 years.” This followed new from the API on Tuesday that showed crude inventories rose by 13 million barrels last week.
4. S&P put Greece’s credit rating on review with negative implications as the financial situation in Greece remains uncertain following the election of Syriza over the weekend. In a statement, S&P said its action, “reflects our view that some of the economic and budgetary policies advocated by the newly elected Greek government, led by the left-wing Syriza party, are incompatible with the policy framework agreed between the previous government and official creditors.”
5. Layoffs at IBM have started. Business Insider’s Julie Bort reports that layoffs at the company have started just a few days after the company flat-out denied a report that the company was going to lay off 100,000 employees. IBM has, however, said that it will take a restructuring charge equal to the lay off of thousands of workers.
6. Currency broker FXCM said on Wednesday that it would forgive 90% of its clients that incurred negative balances following the wild move in the Swiss franc that followed the Swiss National Bank’s announcement that it would abandon its peg against the euro. These clients, however, represent less than half of the debit balances owed to the company, which received a $US300 million lifeline from investment bank Jefferies following the SNB’s decision and the fallout.
7. Apple reported a record quarter on Tuesday night, but on the company’s earnings call analysts wanted to talk about one thing: the dollar. Apple said the dollar will continue to weigh on results, which is sort of a problem for the company. But also not quite.
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