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Dow tumbles more than 200 points after Fed meeting

June 19, 2013|By Andrew Tangel

NEW YORK -- Stocks fell sharply after the Federal Reserve's statement and Chairman Ben Bernanke's news conference Wednesday, with major U.S. indexes losing more than 1%.

The Dow Jones industrial average tumbled 206.04 points, or 1.35%, to 15,112.19 at the closing bell on Wall Street.

The broader Standard & Poor's 500 index shed 22.88 points, or 1.39%, or 1,628.93.

The tech-heavy Nasdaq lost 38.98 points, or 1.12%, to 3,443.20.

Bernanke reiterated the Fed's position that it would continue its monetary stimulus programs until the economy meets certain inflation and employment thresholds.

“He didn’t give us any time frame,” said Alan Whitman, managing director of Morgan Stanley Wealth Management in Pasadena. “I don’t necessarily see this as something that’s going to be occurring quickly."

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Economic data have shown lackluster growth, and investors will expect more help from the Fed, Whitman said. Despite a lousy end day in the stock market, the Fed's statements should assuage anxieties, he said.

“We know that the Fed won't ease up on its help anytime soon,” Whitman said after Bernanke's remarks. "Wall Street will be comforted by these comments.”

The Fed's rosier outlook for the U.S. economy jolted the bond market. Investors have been selling Treasury bonds in anticipation of higher interest rates once the economy improves and the Fed begins to slow down on its purchases of bonds.

The benchmark 10-year Treasury bond's yield hit its highest level in 15 months. The 10-year yield hit an intra-day high of 2.32% on Wednesday afternoon, according to research firm Tradeweb.  Bond yields move inversely to prices.


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