Stocks Stomped by Fed Fallout, Spain Worries
NEW YORK (TheStreet) -- U.S. stocks were stomped Wednesday, weighed down by diminished hopes for additional stimulus from the Federal Reserve and the prospect of more debt problems surfacing in Europe.
The sell-off extended Tuesday's losses, getting the second quarter off to a rough start after a stellar beginning to the year. On Wednesday, a poor Spanish debt auction rekindled concerns about the health of the eurozone, adding to Wall Street's worries after the minutes of the latest Fed meeting, released on Tuesday, put a dent in expectations the central bank had another round of quantitative easing up its sleeve.
The Dow Jones Industrial Average dropped 125 points, or 1%, to close at 13,075. The blue-chip index ranged as low as 13,021 earlier in the session.
Breadth within the Dow was overwhelmingly negative with 26 of the index's 30 components finishing lower. The biggest percentage losers among the blue chips were Alcoa(AA) , Bank of America(BAC) , Cisco(CSCO) , JPMorgan Chase (JPM) and Microsoft(MSFT) ; all of which lost at least 2%.
Quincy Krosby, a market strategist for Prudential Financial, says it's very normal for stocks to start pulling back after such a strong run-up while waiting for the next catalyst.
"The market needed a reason to pullback and took advantage of worries about the Spanish economy and Spanish debt and Fed minutes," Krosby said.