US close: Fed decision and economic data sends markets down
US stocks dropped on Thursday as traders processed the Federal Reserve's decision to raise interest rates for the first time in nearly a decade alongside the latest current account figures.
The Dow Jones Industrial Average dropped 1.43%, the Nasdaq closed down 1.35% and the S&P 500 ended 1.5% lower.
The Fed on Wednesday evening decided to raise interest rates by 25 basis points to 0.50%, as expected by analysts.
However on Thursday Societe Generale strategist Albert Edwards said the Federal Reserve, under Janet Yellen, waited too long to raise rates if she wanted to avoid another meltdown in the global financial system.
In a research report entitled “Fed negligence ... again!”, Edwards said the current Fed chief was cut from the same 'over-confident' cloth as her two immediante predecessors, Alan Greenspan and then Ben Bernanke.
"Similarly I think the Yellen Fed will go down in infamy as deliberately stoking up yet another massive financial bubble," the strategist wrote to clients.
"But unlike the start of the last tightening cycle in 2004, this time the corporate bond market is already severely stressed and it may take just a tiny pin-prick to burst open the putrid excess."
Economics data out on Thursday included the US third quarter current account deficit widening to its highest level in nearly seven years, according to data from the Commerce Department.
Official figures showed the deficit increased 11.7% to $121.4bn as US exports fell due to a stronger dollar, making it the biggest shortfall since the final quarter of 2008 and larger than economists had expected.
The Philadelphia Federal Reserve manufacturing index also fell into negative territory in December. The gauge dropped to -5.9 from 1.9 last month, marking the third negative reading in the past four months and weaker than analysts' expectations for a reading of 1.
Meanwhile the number of first time unemployment benefits claimants in the US fell last week, according to data from the Department of Labor. New claims fell by 11,000 to a seasonally-adjusted 271,000, coming in a little better than expectations of 275,000.
Meanwhile, oil prices fell again, with Brent crude down 1.5% to $36.83 per barrel while West Texas Intermediate dipped below $35 again, down 2.36% to $34.68 at 2143 GMT.
In company news, investors weren’t completely happy with news that Apple named Jeff Williams as its new chief operating officer. Shares in the technology giant sank 2.12% through the day.
Avon Products Inc. jumped after the beauty products company said it entered into agreements with Cerberus Capital Management that include a $605m investment by Cerberus affiliates, but followed the market trend and closed down 1.34%.
General Mills Inc. ended the day down 3.31% after the food company posted earnings and sales that fell short of analysts' expectations.
S&P 500 - Risers
CONSOL Energy Inc. (CNX) $6.90 +3.45%
Marathon Petroleum Corporation (MPC) $51.32 +3.26%
Ameren Corp. (AEE) $44.03 +2.40%
Valero Energy Corp. (VLO) $71.68 +2.11%
FedEx Corp. (FDX) $151.84 +2.02%
Micron Technology Inc. (MU) $14.32 +1.78%
Centerpoint Energy Inc. (CNP) $17.84 +1.36%
CIGNA Corp. (CI) $143.00 +1.28%
Eversource Energy (ES) $51.72 +1.11%
Tesoro Corp. (TSO) $105.95 +1.11%
S&P 500 - Fallers
United States Steel Corp. (X) $7.43 -10.59%
Genworth Financial Inc. (GNW) $3.64 -8.77%
Freeport-McMoRan Inc (FCX) $6.12 -8.52%
Williams Companies Inc. (WMB) $23.70 -8.18%
Newmont Mining Corp. (NEM) $17.61 -7.70%
Marathon Oil Corp. (MRO) $12.78 -7.26%
Wynn Resorts Ltd. (WYNN) $64.27 -6.84%
Peabody Energy Corp. (BTU) $7.49 -6.38%
Total System Services Inc. (TSS) $52.79 -5.53%
Accenture Plc (ACN) $103.26 -5.34%
Dow Jones I.A - Risers
Unitedhealth Group Inc. (UNH) $119.22 +0.33%
Dow Jones I.A - Fallers
Caterpillar Inc. (CAT) $64.90 -4.16%
Chevron Corp. (CVX) $90.54 -3.10%
Merck & Co. Inc. (MRK) $52.66 -2.52%
Wal-Mart Stores Inc. (WMT) $58.98 -2.19%
Apple Inc. (AAPL) $108.98 -2.12%
Goldman Sachs Group Inc. (GS) $182.61 -1.93%
Cisco Systems Inc. (CSCO) $26.72 -1.89%
JP Morgan Chase & Co. (JPM) $66.28 -1.85%
International Business Machines Corp. (IBM) $136.75 -1.80%
Boeing Co. (BA) $145.56 -1.72%
Nasdaq 100 - Risers
Micron Technology Inc. (MU) $14.32 +1.78%
JD.com, Inc. (JD) $32.38 +0.48%
Henry Schein Inc. (HSIC) $155.20 +0.19%
Stericycle Inc. (SRCL) $118.67 +0.05%
Nasdaq 100 - Fallers
Wynn Resorts Ltd. (WYNN) $64.27 -6.84%
Vimpelcom Ltd Ads (VIP) $3.01 -5.05%
Check Point Software Technologies Ltd. (CHKP) $82.67 -4.44%
Viacom Inc. Class B (VIAB) $39.80 -4.12%
Bed Bath & Beyond Inc. (BBBY) $51.71 -3.48%
Cognizant Technology Solutions Corp. (CTSH) $60.42 -3.20%
Celgene Corp. (CELG) $112.17 -3.07%
Illumina Inc. (ILMN) $181.25 -3.03%
Dollar Tree Inc (DLTR) $76.58 -2.90%
Discovery Communications Inc. Class C (DISCK) $25.38 -2.80%