NEW YORK: US stocks
fell on Thursday, a day before Federal Reserve chief Ben Bernanke gives a
much-anticipated speech that will offer hints of how the Fed may act to
stimulate the ailing US economy.
The Dow Jones Industrial Average dropped 170.89 points (1.51 percent) to 11,149.82 in closing trade.
The broader S&P 500 dropped 18.33 points (1.56 percent) to 1,159.27, while the tech-heavy Nasdaq Composite slumped 48.06 points (1.95 percent) to 2,419.63.
Stocks have slumped in recent weeks amid fears of a slowing US economy and fallout from Europe's debt crisis, and investors have been waiting to see if the Fed will react by further loosening monetary policy.
But analysts were skeptical that Bernanke would endorse a further round of quantitative easing, or "QE", in which the Fed buys assets from banks with electronically-generated cash to inject money into the economy.
"The market was nervous about tomorrow," said Marc Pado, chief US market strategist for Cantor Fitzgerald.
"He's not going to come out with QE. It's not going to happen," Pado said.
Apple closed 0.7 percent lower, a relatively muted reaction after its famed chief executive Steve Jobs resigned for health reasons late Wednesday, ushering in a period of uncertainty for the wildly successful tech company.
Bank of America skyrocketed by 9.4 percent after billionaire Warren Buffett agreed to invest $5 billion in the troubled US lender, whose share price has been pummelled in a brutal sell-off in recent weeks.
Buffett's seal of approval for BofA appeared to help other bank stocks too, as Citigroup gained 4.9 percent and Morgan Stanley jumped 2.7 percent.
Bond prices rose. The yield on the 10-year Treasury note dropped to 2.22 percent from 2.26 percent late Wednesday, while that on the 30-year bond fell to 3.59 percent from 3.61 percent.
Bond prices and yields move in opposite directions.
The Dow Jones Industrial Average dropped 170.89 points (1.51 percent) to 11,149.82 in closing trade.
The broader S&P 500 dropped 18.33 points (1.56 percent) to 1,159.27, while the tech-heavy Nasdaq Composite slumped 48.06 points (1.95 percent) to 2,419.63.
Stocks have slumped in recent weeks amid fears of a slowing US economy and fallout from Europe's debt crisis, and investors have been waiting to see if the Fed will react by further loosening monetary policy.
But analysts were skeptical that Bernanke would endorse a further round of quantitative easing, or "QE", in which the Fed buys assets from banks with electronically-generated cash to inject money into the economy.
"The market was nervous about tomorrow," said Marc Pado, chief US market strategist for Cantor Fitzgerald.
"He's not going to come out with QE. It's not going to happen," Pado said.
Apple closed 0.7 percent lower, a relatively muted reaction after its famed chief executive Steve Jobs resigned for health reasons late Wednesday, ushering in a period of uncertainty for the wildly successful tech company.
Bank of America skyrocketed by 9.4 percent after billionaire Warren Buffett agreed to invest $5 billion in the troubled US lender, whose share price has been pummelled in a brutal sell-off in recent weeks.
Buffett's seal of approval for BofA appeared to help other bank stocks too, as Citigroup gained 4.9 percent and Morgan Stanley jumped 2.7 percent.
Bond prices rose. The yield on the 10-year Treasury note dropped to 2.22 percent from 2.26 percent late Wednesday, while that on the 30-year bond fell to 3.59 percent from 3.61 percent.
Bond prices and yields move in opposite directions.
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