New York Report: US stocks slide for three days over stimulus

US STOCKS declined for a third straight session yesterday as Federal Reserve officials suggested the Fed could still begin scaling back its stimulus later this year.

A looming political deadline in Washington added to pressure on the market, where losses over the past three sessions have erased the S&P 500’s 1.2 per cent gain last Wednesday when the Fed decided against reducing its economic stimulus measures.

William Dudley, president of the Federal Reserve Bank of New York, said in a speech the timeline that Fed chairman Ben Bernanke articulated in June for scaling back the central bank’s stimulus measures is “still very much intact”, as long as the economy keeps improving.

Banks led the S&P 500’s decline, with Citigroup down 3.2 per cent at $49.57, a day after the Financial Times reported Citi had a significant drop in trading revenue during the third quarter. The S&P financial index lost 1.5 per cent. Shares of JP Morgan Chase were down 2.5 per cent at $51.46.

The Fed last week decided against reducing asset purchases from the current $85bn monthly pace.

The Dow Jones industrial average was down 49.71 points, or 0.32 percent, at 15,401.38. The Standard & Poor’s 500 Index was down 8.07 points, or 0.47 per cent, at 1,701.84. The Nasdaq Composite Index was down 9.44 points, or 0.25 per cent, at 3,765.29.

US-listed shares of Blackberry closed up 1.1 per cent at $8.82 after a consortium led by Fairfax Financial offered to buy the Canadian smartphone maker.