US stocks have closed lower after the Federal Reserve kept monetary policy unchanged – a widely expected move that nevertheless disappointed those hoping for a sign of new economic stimulus.
All eyes have turned toward Europe, where the European Central Bank holds its policy meeting Thursday under pressure to take further action to quell the eurozone sovereign debt crisis and spur stuttering economic growth.
After scoring moderate gains, the equity markets headed slightly south following the Federal Open Market Committee’s (FOMC) announcement of no fresh action to boost the slowing economy.
The Dow Jones Industrial Average closed 32.55 points, or 0.25 per cent, lower at 12,976.13. The blue-chip index was back below the psychological closing level of 13,000 it had topped Friday for the first time since May.
The S&P 500-stock index slid 4.00 points (0.29 per cent) to 1,375.32 and the tech-rich Nasdaq dropped 19.31 (0.66 per cent) to 2,920.21.
Wall Street equity markets have closed in the red for three straight days.
“The FOMC today disappointed by announcing nothing new to stimulate the economy, not even an extension of its rate guidance, which remains late 2014, despite the market now expecting rates will remain in the current target range through the middle of 2015,” said Chris Low at FTN Financial.
In early trade, stocks got a boost from a stronger-than-anticipated July jobs report. Payrolls company ADP said private-sector employment rose by 163,000 in July, slowing from a revised June gain of 172,000.
But contraction in the manufacturing sector for the second straight month in July, reported by the Institute for Supply Management, dented sentiment.
Among stocks in focus, media and cable giant Comcast leaped 3.1 per cent after reporting forecast-beating quarterly earnings.
Time Warner rose 1.2 per cent. The media company posted a quarterly profit fall that was not as bad as expected.
Meanwhile, automakers reported US new vehicle sales for July, with privately held Chrysler putting in its best July performance in five years.
But General Motors and Ford posted slower sales than a year ago; GM shares slipped 0.3 per cent and Ford slid 1.6 per cent.
On the Dow, Hewlett-Packard led the decliners, tumbling 3.2 per cent.
Facebook dropped 3.8 per cent to a record low $20.88, down 45 per cent from the social media titan’s initial offering price in May of $38.
Bond prices retreated. The 10-year Treasury yield rose to 1.54 per cent from 1.49 per cent Tuesday, while the 30-year climbed to 2.61 per cent from 2.58 per cent. Bond yields move inversely to prices.
