U.S. stocks fell, with the Standard & Poor’s 500 Index headed for a one-month low, while Treasuries and the yen gained as the Federal Reserve said it would make further reductions in economic stimulus and as emerging-market currencies weakened. Gold and natural gas climbed.
The January statement released minutes ago is practically identical to the prior month and contains the highly anticipated continuation of measured reduction in the monthly pace of bond purchases. The FOMC voted unanimously, and we don’t recall off hand the last time that happened.
With South Africa and Turkey raising rates to support their currencies, as well as a possible second taper announcement occurring today from the U.S. FOMC, stock markets could be retreating because of these interest rate moves.
Hump day is providing investors with a major speed bump before the market opens. The E-Mini contract is trading down to as low as 1772.25, almost 30-handles lower than the overnight high set just hours ago.
U.S. stock index futures pared a gain of 8-points following the release of a disappointing durable goods report. New orders for longer-lasting goods slumped at year-end by 4.3% leaving estimates of a rise wanting.
The S&P stabilized well by midday yesterday after putting in new lows reaching 1767. The FOMC begins its two day meeting today and many feel that the market has gone through a self-correction and that Bernanke and the Fed will remain on pace tapering.