U.S. stocks finished lower amid choppy trade after Federal Reserve Chairman Ben Bernanke said the central bank needed to see further signs of traction in the economy before it cut back its economic stimulus efforts. All major sectors erased earlier gains with the Dow experiencing a 234 point reversal from its intraday high. Utilities, Energy, and Materials led markets lower, while Healthcare and Staples fared the best. Gold and Crude Oil are lower.
Bernanke said the Fed’s monetary stimulus plan is helping the U.S. economy recover, and offered no sign that he is ready to retreat from the Fed’s latest round of bond buying. FOMC officials also said more progress in the labor market is needed before deciding to slow the pace of asset purchases.
Dow closed down 80.41 pts/-0.52% to 15,307.17; 22 of the 30 Dow stocks closed lower.
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From The Trading Floor: The markets opened in positive territory this morning over optimism that Fed President Bernanke will be inclined to stay the course on QE as he testifies before Congress this morning
Sales of previously owned homes, rose in April to an annual rate of 4.97 million, the highest level in more than 3 years
At 2 PM ET, the Federal Reserve will release the minutes from the FOMC's April 30-May 1 monetary policy meeting. The big debate in the markets over the past two weeks or so has been whether the Fed could taper off bond purchases sooner than markets expect, so any discussion in the minutes that sheds light on this will be of interest.
The Bank of Japan elected to keep monetary policy unchanged as expected at its May policy meeting after launching an unprecedented bond buying program in April
U.K retail sales unexpectedly fell by -1.3% on a drop in food demand