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U.S. Stocks End Lower As Bernanke Backs off on Stimulus
Jul 15,2011 10:32CST
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Source:SMM
U.S. stocks pared early gains and ended in negative territory after Federal Reserve Chairman Ben Bernanke seemed to back off from his previous remarks on extra stimulus.

NEW YORK, Jul. 15 -- U.S. stocks pared early gains and ended in negative territory after Federal Reserve Chairman Ben Bernanke seemed to back off from his previous remarks on extra stimulus.

Stocks started off on up note after government report showed employer cut off less jobs last week. According to the Labor Department, the number of people filing for unemployment benefits dropped 22,000 000 in the week ending July 9 to a seasonally adjusted 405,000, the lowest level in almost three months.

Also easing concerns, the Italian Senate on Thursday approved a key austerity package aimed at convincing investors that the eurozone's third-largest economy won't be swept into the debt crisis.

However, gains were checked as Moody's Investors Service late Wednesday put the Aaa bond rating of the United States on review for possible downgrade, given the rising possibility that the statutory debt limit will not be raised in time.

The rating agency said that the review of the U.S. government's bond rating is prompted by the possibility that the debt limit will not be raised in time on Aug. 2, to prevent a missed payment of interest or principal on outstanding bonds and notes.

Stocks pared earlier gains in late morning session as investors rethought Bernanke's remarks.

In his second day of testimony before Congress, Bernanke reiterated that the central bank would take extra actions to stimulus the economy if the outlook worsens, however, he said the Fed was not prepared to launch a third round of quantitative easing at the moment.

Wednesday's earnings came in better than expected, but did little to help the slide.

JPMorgan Chase, the U.S. second largest bank, posted better- than-expected second-quarter earnings on Thursday, driving its stocks nearly 2 percent up.

Google's shares surged after-hours after ending the session lower as the search giant delivered a blowout quarter, beating on both earnings and revenue.

In other markets, the U.S. dollar traded mixed against its major counterparts, while oil plunged more than 2.4 percent to settle at 95.69 dollars a barrel on the New York Mercantile Exchange.

As of Thursday's close, the Dow Jones industrial average dropped 54.49 points, or 0.44 percent, to 12,437.12. The Standard & Poor's 500 lost 8.85 points, or 0.67 percent, to 1,308.87. The Nasdaq Composite Index fell 34.25 points, or 1.22 percent, to 2, 762.67.

 

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