US stocks fell for a third straight day yesterday on growing concerns over the longevity of the Federal Reserve’s stimulus policy, which has been widely credited with fuelling the market’s gains this year.
Even after shares suffered their biggest decline since 24 June on Tuesday, the market was unable to shake off comments from a pair of Fed officials on Tuesday that muddied the water over how soon the central bank might reduce its bond-buying program. The S&P 500 broke below 1,693.95, its 14-day moving average that had been serving as a support level.
Walt Disney was the top decliner on the blue chip Dow Jones industrial average index. The stock fell 3 per cent to $65.04 a day after projecting a massive loss related to its film, “The Lone Ranger,” though adjusted earnings slightly beat expectations.
Time Warner shares rose 2.6 per cent to $66.65 after the company reported a bigger revenue than had been forecast. AOL rose 2.7 per cent to $37.21 after it reported results and said it would buy Adap.tv, a video ad platform, for $405m. On the downside, First Solar fell 10 per cent to $41.90 after it reported results Tuesday that were below expectations and cut its full-year outlook. Ralph Lauren fell 6.2 per cent to $177.77 as profits declined. Both companies were among the S&P 500’s biggest percentage decliners.
Equity markets have been closely tethered to central bank policy, with many investors concerned that economic growth isn’t robust enough to boost markets without the Fed’s help. The Dow Jones industrial average fell 48.07 points or 0.31 per cent, to end at 15,470.67. The S&P 500 declined 6.46 points or 0.38 per cent, to 1,690.91. The Nasdaq Composite dropped 11.761 points or 0.32 per cent, to 3,654.009.