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U.S. stocks drop as investors mull implications of Fed call

An American flag hangs over the New York

An American flag hangs over the New York Stock Exchange on Wall Street on Sept. 15, 2015. Credit: Getty Images / Spencer Platt

U.S. stocks dropped in morning trading Friday as investors consider the implications of the Federal Reserve's decision to hold off raising interest rates. The price of oil fell sharply, pushing down energy stocks. Financial stocks, which would benefit from higher rates, also dropped.

KEEPING SCORE: The Dow Jones industrial average fell 185 points, or 1.1 percent, to 16,490 as of 11:18 a.m. Friday on Wall Street. The Standard & Poor's 500 fell 18 points, or 0.9 percent, to 1,973 and the Nasdaq composite declined 32 points, or 0.7 percent, to 4,861.

THE FED: The Federal Reserve decided Thursday to keep interest rates at record lows for now, citing low inflation, weakness in the global economy and unsettled financial markets. Investors appear worried by the central bank's concern about the global economy. The Fed meets again next month and in December.

EUROPE SLUMPS: Germany's DAX was down 2.7 percent while the CAC-40 in France fell 2.3 percent. Britain's FTSE 100 was 0.9 percent lower.

PLANE PROBLEMS: Aviation equipment manufacturer Rockwell Collins slumped after the company's sales forecast for next year came in lower than analysts' forecasts. The company cited weak demand for business and regional jets. Its stock fell 83 cents, or 1 percent, to $84.45.

BANK BLUES: JPMorgan Chase fell $1.59, or 2.5 percent, to $61.06 as investors judged that lower interest rates for longer mean banks won't be able charge more for loans. Citigroup slumped $1.13, or 2.2 percent, $50.50.

CURRENCIES: The euro was down 0.2 percent at $1.1378. The dollar dropped against the Japanese yen, trading 0.5 percent lower at 119.83 yen.

TUMBLE IN TOKYO: The dollar's decline against the yen hit Japanese stocks. A stronger yen makes hurts Japan's exports. The Nikkei 225 fell 2 percent as traders fretted about the potential impact on Japanese exports stemming from the yen's appreciation.

OIL DOWN: The price of U.S. crude fell $1.39 to $45.53 a barrel on concerns over the slowing global economy. Brent crude, the main contract for international oils, fell 84 cents at $49.03.

BONDS: Prices of U.S. government bonds rose, pushing down the yield on the 10-year benchmark Treasury note to 2.16 percent.

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