US stocks drop as mood shifts against central bank moves
By DPA, IANSTuesday, November 9, 2010
NEW YORK - US stocks fell Tuesday as some investors expressed unease over the US central bank’s plan to revive the economy by purchasing $600 billion in government debt over the coming months.
The Federal Reserve’s new round of “quantitative easing” had rallied markets after it was revealed last week, pushing the Dow Jones Industrial Average to levels not seen since before the 2008 financial crisis.
But investors appeared to be retreating this week from their initial optimism, fearing the Fed’s move could have little affect and may drive up inflation. Those worries have also pushed up the value of the dollar in the past few days.
“We’ve had backlash against quantitative easing, … which is obviously helpful for the dollar and negative for stocks,” Jason Brady of Thornburg Investment Management told Bloomberg News.
The blue-chip Dow Jones Industrial Average fell 60.09 points, or 0.53 percent, to 11,346.75. The broader Standard and Poor’s 500 index dropped 9.85 points, or 0.81 percent, to 1,213.4. The technology-heavy Nasdaq Composite Index dipped 17.07 points, or 0.66 percent, to 2,562.98.
The US currency climbed against the euro to 72.6 euro cents from 71.83 euro cents on Monday. The dollar rose against the Japanese currency to 81.72 yen from 81.17 yen.
