Pull Back!! Stocks Slipping on Budget Deal, Fed Policy
The bipartisan budget deal announced late Tuesday -- which still needs approval from the House and Senate -- sets federal agency spending levels at $1.014 trillion for next fiscal year and reduces the chances of a government shutdown. The agreement increases the possibility that the Fed will reduce the size of its $85 billion in monthly bond purchases, a major factor in equities 2013 rally.
- The Standard & Poor's 500 was falling 0.87% to 1,787.28 while the Dow Jones Industrial Average was 0.53% lower to 15,888.78. The Nasdaq was slipping 1.11% to 4,015.70.
- "There is concern ahead of the Fed meeting -- we've had good GDP and employment data and now this budget deal alleviates some stress -- when we were expecting the taper earlier this year my gut said they wouldn't due to dysfunction in Washington -- but now that pressure has been relieved," Jon Sablowsky, head of trading at Brownstone Investment Group in New York said in a phone interview.
- While the S&P 500 managed to hit a record closing high earlier in the week, it has since drifted lower on the Fed policy uncertainty and in the absence of any substantial economic releases.
shed 1.7% after its push in a European Union court to overturn approval of Microsoft's 2011 takeover of Skype Technologies
was falling 1% to $118.84, after posting first-quarter net income of 96 cents a share, 6 cents lower than Thomson Reuters forecast. After market close Tuesday, MasterCard's board approved a stock split via a stock dividend and authorized a buyback program of up to $3.5 billion of Class A common stock. The stock was jumping 3.9% to $793.36.
Smith & Wesson
shot up 4.1% after handgun sales increased. Second-quarter net income of 28 cents a share beat consensus by 7 cents. Men's Wearhouse , due to report its third quarter after the bell, is expected to post earnings of 86 cents a share.
- Wednesday's economic calendar is light with the Treasury Budget due at 2 p.m.
- Germany's DAX was shedding 0.41% while the FTSE was off 0.24%. The Nikkei closed down 0.62% while the Hang Seng was off 1.71%.
--By Jane Searle in New York