The reality of the Federal Reserve’s FMOC Statement on Wednesday seemed to finally sink in today as investors abandoned ship and left the Dow Jones Industrial Average to plummet 145.71 points and close at 10,152.73.
The statement discussed the fact that economic recovery was expected to continue at a moderate pace in spite of loosened bank lending and rising expenditures by businesses. The report also mentions that both the housing market and employment levels are depressed.
Overall nervousness about the potential results of the upcoming G-20 meeting seems to have spooked Asian and European investors with all markets but Japan’s Nikkei closing down in Thursday. Not helping matters is the increased likelihood that Greece will default on its debt according to the CMA Sovereign Risk Monitor.
Yet another factor in Thursday’s market slump could be the almost-finished rewrite of Wall Street’s operating rules in the Wall Street reform bill. The bill includes stiffer regulations for derivatives and investing activities banks can take part in with their own money. While the bill may help Wall Street and investors in the future, the prospect of having completely new rules to play by for the first time in 80 years is making many investors bearish.
The S&P 500 closed at 1,073.69 down 18.35 points and the Nasdaq closed down 36.81 points at 2,217.42.