The FOMC meeting minutes led to a quick drop in all the major currency pairs and more importantly the U.S. stock market, where the Dow Jones Index recorded a huge slump. Moreover, the S&P 500 index fell by more than 0.6% where it dropped from 1654 resistance area down to 1635 where it gave closing at the end of the U.S session.
Bears loved the FOMC session as a majority of the FOMC members agreed on the fact that the labor market is improving substantially, and the economy would pick up considerably in the second half of this year where tapering would need to be started by the end of this year. There was still uncertainty as to when exactly the bond buying stimulus plan will be reduced, however, the message was clear for the investors and it was that FED did NOT deny that it would not taper in the near future, but in fact stated that it would be done at the right time that could even come before the end of 2013.
Target Slumps as Retail Sector Hits
The retail sector in the United States has recently been facing some problems where Wal-Mart and Macys has also faced huge losses due to low consumer demand, and now Target also witnessed a 3.6% drop in its shares all of a sudden. The share price has now gone down to the $65.5 level which is the lowest in 5 months. The reason behind low spending power is the imposing of increased social security taxes that are keeping consumers from spending unnecessarily.
Wearing Less Variety
American Eagle Outfitters Inc. dropped by a massive 9.9% after which its share price has fallen to $14.76 after breaking the support level of $15.18, as the clothing chain recorded lower than expected sales for the second quarter of 2013.
Programming Error – Loss
Goldman Sachs just experienced a drama. There was a programming error that resulted in sending unintended stock options orders at the start of the trading session, hence bringing down the prices on a number of contracts by a meager amount. The stock price of Goldman Sachs is now hovering over the level of $157.11 after a 1.5% drop, which may not have happened, had if this programming error had not occurred. However, the price is still at a strong level where it may regain in a few days as the market is set to give some upward correction.
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