NEW YORK, June 20 (Xinhua) -- U.S. stocks continued to plummet on Thursday, after Federal Reserve Chairman Ben Bernanke said Wednesday that the Fed may taper stimulus efforts later this year following a two-day policy meeting.
The Dow Jones Industrial Average plunged 353.95 points, or 2.34 percent, to 14,758.24 points. The S&P 500 fell 40.74 points, or 2. 50 percent, to 1,588.19 points. The Nasdaq Composite Index shed 78. 57 points, or 2.28 percent, to 3,364.63 points.
The three stock indices dropped to their lowest levels over one and a half months. The Dow and S&P 500 logged their biggest one- day losses this year.
"I do not believe this is the beginning of a bear market for the U.S. stock market. Rather, I think the market sell off we have seen since Bernanke press conference yesterday is the market coming to the realization that the Fed will eventually curtail its bond buying," Gregory J. Keating, managing director of New York- based James E. Coffey Securities Inc, told Xinhua on Thursday.
The Fed announced Wednesday to keep its federal funds rate and pace of asset purchases unchanged in its June meeting, but Bernanke struck a hawkish chord in a news conference following the meeting when he said bond buying could be reduced later this year, depending on economic conditions.
Bernanke's remarks sent the U.S. equity market into a free fall in the last hour of trading on Wednesday, with all three major indices losing over 1 percent.
Global markets also plunged on tapering fears on Thursday. In Asian stock markets, the Japanese Nikkei dropped 1.74 percent and China's benchmark Shanghai Composite Index fell 2.77 percent. In Europe, the major stock indices skidded about 3 percent.
Keating added: "Short term I think the market may continue to see weakness on this realization however long term I believe it is positive in the fact that the Fed feels the economy is picking up and will eventually be able to sustain itself without the Feds involvement."
The economic data from the United States came in mixed on Thursday, exerting little influence on the stock market.
In the week ending June 15, the advance figure for seasonally adjusted initial claims was 354,000, an increase of 18,000 from the previous week's revised figure of 336,000, the U.S. Labor Department reported Thursday. The fresh figure was higher than analysts' estimates of rising to 340,000.
Meanwhile, the four-week moving average, a less volatile measure, increased 2,500 to 348,250, the department added.
Moreover, the U.S. flash manufacturing Purchasing Managers' Index (PMI) slipped to 52.2 in June, little changed from May's 52. 3, suggesting that U.S. manufacturing expansion remained modest during June, global financial information services company Markit said Thursday in a report.
Besides, U.S. existing-home sales rose 4.2 percent to a seasonally adjusted annual rate of 5.18 million in May from 4.97 million in April, according to the National Association of Realtors.
Among other data, the Federal Reserve Bank of Philadelphia said Thursday that its general business conditions index for June increased from minus 5.2 in May to 12.5, its highest reading since April 2011. The Conference Board Leading Economic Index for the U. S. increased 0.1 percent in May to 95.2.
The CBOE Volatility Index, widely considered as a fear gauge of the market, hit 20 for the first time this year. The index surged 23.14 percent to end at 20.49.
All key sectors in the S&P 500 finished sharply lower.
In other markets, light, sweet crude for July delivery lost 2. 84 dollars, to settle at 95.4 dollars a barrel on the New York Mercantile Exchange on Thursday. Brent for August delivery went down 3.97 dollars, to close at 102.15 dollars a barrel.
Gold future for August delivery on the COMEX division of the New York Mercantile Exchange tumbled 87.8 dollars, or 6.39 percent, to settle at 1,286.2 dollars per ounce on Thursday. It was the first time that the gold price fell below the 1,300 level since September 2010.
The U.S. dollar surged against major currencies on Thursday after Bernanke signaled a possible cut of stimulus program later this year. In late New York trading, the euro dropped to 1.3196 dollars from 1.3274 dollars of the previous session and the British pound decreased to 1.5478 dollars from 1.5486 dollars.
WASHINGTON, June 19 (Xinhua) -- The U.S. Federal Reserve chairman Ben Bernanke said on Wednesday that the central bank would start scaling back its massive bond-buying program later this year if the economy improves as expected.
In a news conference after the Fed wrapped up its two-day policy meeting, Bernanke said although the Federal Open Market Committee (FOMC), its policy-setting panel, didn't make immediate changes to the pace of bond purchases, it may vary the pace of purchases as economic conditions evolve. Full story
LONDON, June 20 (Xinhua) -- The economic impact of Fed tapering its asset purchases under QE3 later this year on emerging markets (EMs) likely to be limited, local analysis said Thursday.
Wednesday's Federal Open Market Committee (FOMC) meeting cemented expectation that the U.S. Federal Reserves will start to taper its asset purchases under QE3 later this year and has weighed on EMs financial markets Thursday, according to Capital Economics in London. Full story
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