On Wall Street, stock prices slipped from record levels on Thursday following a statement from officials at the U.S. central bank that the Fed could begin to reduce its bond-buying programs this summer.
The Dow Jones fell by 42 points, or 0.28 percent, to 15,233 points, while the S&P 500 declined by 0.50 percent to 1,650 points, and the Nasdaq index dropped by 0.18 percent to 3,465 points.
For most of the day, the indices did not fluctuate significantly as, apart from strong quarterly earnings from Cisco Systems, which caused the stock price of the tech giant to rise by 12 percent, there were no other news to prompt investors to buy stocks.
A few macroeconomic data points that were weaker than expected did not shake investors, but rather fueled hopes that the U.S. central bank would continue to pursue a loose monetary policy until the economic recovery becomes self-sustaining.
The Fed’s bond-buying programs for government and mortgage-backed securities at $85 billion per month inject fresh, cheap money into the financial markets, which is the main reason for the strong growth in stock prices in recent months.
However, this may be coming to an end, John Williams, president of the Fed’s San Francisco branch, indicated yesterday. He stated that the Fed could begin to reduce these bond-buying programs this summer and possibly eliminate them entirely later in the year, as the situation in the U.S. labor market improves, which the central bank has set as its primary goal.
