Fed Uncertainties Weigh Down Stocks Even as BlackBerry Rises
NEW YORK ( TheStreet) -- Major U.S. stock markets finished Monday in the red, with the S&P 500 and Dow Jones Industrial Average logging their first three-day decline in a month as investors weighed the sugar rush that the Federal Reserve's ultra-loose accommodation has been providing against the still vulnerable economic backdrop that caused the central bank to maintain its $85 billion per month bond-buying stimulus program.
The uncertainty behind the pace of economic stimulus as well as the contentious budget negotiations in Washington were undermining encouraging manufacturing data from China and a strong showing in Germany elections for the party of Chancellor Angela Merkel.
BlackBerry rose 1.09% to $8.82. Just one trading day after the company decided to quit the consumer smartphone market and become an enterprise focused handset and IT services firm, BlackBerry found a willing buyer in Fairfax Financial at $9 a share, or $4.7 billion.
Apple popped 4.97% to $490.64 after the company announced that it sold more than 9 million iPhone 5c and 5s units, breaking the previous record set last year. A year earlier, Apple sold more than 5 million iPhone 5 units across the globe.
Speaking to an audience at the Fordham University Graduate School of Business in New York Monday, New York Fed Bank President William Dudley said that central bank during its meeting this month decided to maintain its current $85-billion-a-month pace in asset purchases given that "we have made progress with respect to these metrics, but have not yet achieved success." He added that "our actions are data dependent and how the data will evolve is uncertain." Furthermore, Dudley emphasized that it's likely to take a considerable amount of time to reach the 6.5% unemployment rate threshold that the Fed is watching for as a guideline for determining a gradual exit of unusually low short-term rates and that it still might wait a long time after the U.S. economy breaches that threshold before beginning to raise the fderal funds rate.
Prior to Dudley's appearance, Atlanta Federal Bank President Dennis Lockhart told an audience at the Louise Blouin Foundation in New York that there is "some evidence to the affirmative" that the U.S. is "losing its economic mojo."