Stocks Tumble After Bernanke Comments
Stocks tumbled on Thursday, with all three major indexes ending the day at session lows, after comments from Federal Reserve Chairman Ben Bernanke. The Fed Chairman, on Wednesday, said that the central bank might start easing its $85 billion a month bond buying program towards the end of this year if the economy continues to improve.
Bernanke’s comments sparked a sell-off in late trading on Wednesday, which continued on Thursday. Market sentiment was also weighed down by disappointing manufacturing data from China. On Thursday, the Dow Jones ended 2.34% lower at 14,758.32, the S&P 500 ended 2.50% lower at 1,588.19, and the Nasdaq ended 2.28% lower at 3,364.63.
All sectors in the S&P 500 tumbled on Thursday. Basic Materials sector was the worst performer in the S&P 500, ending the day 3.34% lower. Utilities fell 3.22% on Thursday, while Energy sector ended 2.94% lower.
Among the major movers in trading on Thursday were PulteGroup Inc. (NYSE: PHM), which ended the day 9.10% lower at $18.87, Microsoft Corporation (NASDAQ: MSFT), which ended the day 3.18% lower at $33.49, and Google Inc. (NASDAQ: GOOG), which ended the day 1.77% lower at $884.74.
On the economic front, a report released by the Labor Department showed that initial jobless claims rose 18,000 to a seasonally adjusted 354,000 last week. Meanwhile, existing home sales rose in May to the highest level in three-and-a-half years, according to data from the National Association of Realtors. The Philadelphia Fed reported that factory activity in the mid-Atlantic region rose to 12.5 in the month of June.
European markets ended mostly lower on Thursday, with the FTSE 100 Index in London closing 2.98% lower, and the CAC 40 Index in Paris closing 3.66% lower. Asian markets also tumbled overnight, with the Nikkei 225 Index in Japan closing 1.74% lower, and the Hang Seng Index in Hong Kong closing 2.88% lower.