On Wall Street, stock prices fell for the third consecutive day on Wednesday, as investors fear that the Fed may soon begin to reduce the stimulus monetary programs that have long supported market growth.
The Dow Jones weakened by 48 points, or 0.31 percent, to 15,470 points, while the S&P 500 slid 0.38 percent to 1,690 points, and the Nasdaq index fell 0.32 percent to 3,654 points.
The decline in stock prices for the third consecutive day is a result of investor uncertainty due to the possibility that the U.S. central bank could begin to reduce its $85 billion monthly purchases of government and mortgage-backed securities as early as September.
Investors fear that by reducing these programs, the market would lose strong support.
“The biggest story, of course, is the reduction of stimulus. Investors are afraid that in that case, the price growth is not sustainable in the short term, that stocks are too expensive given the fundamentals,” says Steven Massocca, director at Wedbush Equity Management.
Investors are concerned that the Fed will reduce stimulus before the U.S. economy is firmly on the path to recovery. Macroeconomic data, however, indicates economic growth, but not very strong.
