Stocks fall amid Fed stimulus worries
Traders work on the floor of the New York Stock Exchange during morning trading Monday. Stocks were mixed in morning trading after a 208-point drop in the Dow on May 31. (June 3, 2013) Credit: Getty Images
The Federal Reserve guessing game threw the markets for another loop Tuesday.
Comments from a Fed official raised expectations that the central bank could start easing its support for the economy soon, sending the stock market sharply lower in the late afternoon. The market recovered in the last hour of trading to end with slight losses.
Snippets from a prepared speech by Esther George, president of the Kansas City branch of the Federal Reserve, were reported in the early afternoon. George pointed to "improving economic conditions" as well as evidence that financial markets were getting dependent on the Fed's support. "I support slowing the pace of asset purchases as an appropriate next step for monetary policy," she said.
It was the latest volatile turn in stock trading as investors try to figure out when the Fed will make a move -- nobody is quite sure when that will happen.
The next big data point for investors is the Labor Department's monthly employment survey due out Friday.
The Standard & Poor's 500 index fell 0.55 percent to close at 1,631.38. The Dow Jones industrial average lost 76.49 points to 15,177.54. The Nasdaq composite index fell 0.58 percent to 3,445.26. -- AP
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