Markets Continue To Drop Over Fed Stimulus Concerns

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.