Stocks
continued their drop for the third day on Wednesday over concerns on the Federal
Reserve’s bon-buying stimulus program which has helped bolster the markets this
year.
The
decline comes after remarks from two Fed officials that cast doubt on the
timing of the reduction of the stimulus program. Questions over the timing and
pace of the bond-buying slowdown weighed heavily on the markets, with the market
showing its biggest decline on Tuesday since June 24.
The S&P 500 fell
below 1,690 and the Dow Jones Industrial Average dipped below 15,500 on
Wednesday. Although the S&P 500 index is down about 1.4 percent for the
week, it is still up 20 percent this year. And despite the DJIA being down more
than 80 points today, it is up over 19 percent for the year.
U.S.
equity markets have been closely tied to central bank policy, with many
investors concerned that economic growth isn't robust enough to boost markets
without the Fed's help. Last week, the July payroll report came in much weaker
than expected. On Tuesday, Chicago Fed President Charles Evans said the
bond-buying program would probably begin to scale back later this year, perhaps
as soon as September. That echoed earlier comments by Dennis Lockhart,
president of the Federal Reserve Bank of Atlanta, though he said the Fed might
continue its stimulus program if growth doesn't meet its targets.
The timing of the tapering
is dependent on employment and economic data. The target for the end of the
program is when unemployment stabilizes at 7 percent.