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Stocks sink on Fed, emerging market fears
local10.com ^ | 1/28/2014 | Ben Rooney

Posted on 01/29/2014 6:04:28 PM PST by Signalman

While the Fed's decision was not a surprise, some investors had expected the central bank to address the recent turmoil in Turkey and other emerging markets that has spilled over to Wall Street.

Drew Nordlicht, managing director at wealth management firm HighTower in San Diego, said that investors were disappointed by the Fed's decision to "not even acknowledge the strains" in emerging markets.

The Dow Jones industrial average lost nearly 190 points. Boeing was the biggest drag on the Dow as investors were disappointed by its earnings outlook. AT&T also gave earnings guidance that fell short of expectations. The S&P 500 and the Nasdaq both fell more than 1%.

Stocks started the day on a sour note due to concerns about Turkey. The Turkish lira fell further Wednesday despite an emergency interest rate hike Tuesday. Investors have been rattled in recent weeks by what some are now calling the Fragile Five of developing markets: Turkey, India, Brazil, Indonesia and South Africa.

In addition to Turkey, India and South Africa have raised rates this week to stabilize shaky currencies. The Argentinian peso has been in free fall since Argentina's government moved to devalue the currency last week. China has also been a source of concern since a report on manufacturing activity came in weaker than expected last week.

Many emerging markets have benefited over the past few years as the Fed and other central banks have pumped money into the global economy. But investors have been pulling out of emerging markets this year now that the Fed has begun to scale back its bond buying. The bet is that higher rates (and a stronger dollar) in the U.S. will make emerging market investments far less attractive.

And even though nobody was surprised by the Fed's decision to reduce its bond-buying program to $65 billion a month from $75 billion, the move clearly rattled investors.

"There was a real visceral reaction that may have been about emerging market fears," said Kristina Hooper, U.S. investment strategist at Allianz Global Investors. "Clearly the market has fragile nerves right now. Even an expected event can cause jitters."

What's moving? Yahoo shares sank more than 8% following weak quarterly earnings and sales results. That made Yahoo the worst performing stock in CNNMoney's Tech 30 index.

After the market closed, Facebook reported earnings and sales growth that blew past analysts' expectations. The stock surged on the news.

Apple shares were down again. The stock has been under pressure since the company reported iPhone sales Tuesday that fell short of expectations. Apple briefly dipped below $500 for the first time since October.


TOPICS: Business/Economy
KEYWORDS: djia; markets

1 posted on 01/29/2014 6:04:28 PM PST by Signalman
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To: Signalman

~~~That made Yahoo the worst performing stock in CNNMoney’s Tech 30 index.~~~

Keep sucking up to Obama and pushing that gay marriage thing, Yahoo.

Brilliant!!!


2 posted on 01/29/2014 6:07:35 PM PST by F15Eagle (1Jn4:15;5:4-5,11-13;Mt27:50-54;Mk15:33-34;Jn3:17-18,6:69,11:25,14:6,20:31;Ro10:8-11;1Tm2:5-6;Ti3:4-7)
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To: Signalman

Well, kinda. Stuff opened down half of that total loss and lost a little more before the big-deal announcement at 2 PM. Then “They” jammed everything up and down at least three times by the close. As FOMC announcement-day action goes, it was actually on the mild side.


3 posted on 01/29/2014 6:07:36 PM PST by jiggyboy (Ten percent of poll respondents are either lying or insane)
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To: Signalman

Don’t worry the gov’t will continue to bail out the market, the Fed is just reminding them “Who’s Your Daddy”.


4 posted on 01/29/2014 6:29:19 PM PST by PoloSec ( Believe the Gospel: how that Christ died for our sins, was buried and rose again)
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To: Signalman

“Stocks started the day on a sour note due to concerns about Turkey. The Turkish lira fell further Wednesday despite an emergency interest rate hike Tuesday. Investors have been rattled in recent weeks by what some are now calling the Fragile Five of developing markets: Turkey, India, Brazil, Indonesia and South Africa.

In addition to Turkey, India and South Africa have raised rates this week to stabilize shaky currencies. The Argentinian peso has been in free fall since Argentina’s government moved to devalue the currency last week. China has also been a source of concern since a report on manufacturing activity came in weaker than expected last week. “

So much for the so-called BRICs.


5 posted on 01/29/2014 6:34:40 PM PST by Lurkina.n.Learnin (This is not just stupid, we're talking Democrat stupid here.)
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To: Signalman

meanwhile, Gold is up $13/oz. Same thing happenmed in last week’s plunge. Interesting that Gold is no longer moving in lockstep with the market.


6 posted on 01/29/2014 7:06:22 PM PST by RC one
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To: Signalman

Asian Contagion, Part Deux?


7 posted on 01/29/2014 7:47:27 PM PST by montag813
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