iven the upward momentum of stocks so far this year, it seems crazy when the Dow Jones Industrial Average has a bad day — yet here we are. As of 2:15 p.m. EST, the index has fallen 88 points, or 0.63%, with all but five of the 30 Dow stocks in the red and a number seeing significant losses. It’s not a big announcement or an earnings shock that’s taking down the markets today, however. Rather, investors fear the pullback of stimulus dollars. Let’s catch up on the details.
Quantitative-easing worries don’t ease up
The Federal Open Market Committee released its minutes for its most recent meeting, and investors were not pleased. Several members of the committee mentioned possibly adjusting the asset purchases of ongoing economic-stimulus efforts, believing the economy is picking up steam. Unfortunately, the last thing Wall Street wants to see is the money spigot being turned off. Some investors waiting for a pullback in the bull market found their buying opportunity today.
Even the hint of a possible reduction of stimulus has hit financials hard. Bank of America Corp (NYSE:BAC) is leading all Dow laggards down, having lost 3.6% so far today. While some Wall Street sources considered the scaling-back of stimulus proof of the FOMC’s belief in the economy’s recovery, any actual pullback of easing will hamper the momentum B of A and fellow financial stocks have picked up recently. Bank of America has soared in the QE climate, gaining more than 44% over the past six months. Sharing in the pain, shares of JPMorgan Chase & Co. (NYSE:JPM) have also fallen a more modest 1.3%.
The Home Depot, Inc. (NYSE:HD) hasn’t been lighting it up today either, down 3% so far. Financial firm Stifel Financial Corp. (NYSE:SF) downgraded both Home Depot and rival Lowe’s Companies, Inc. (NYSE:LOW) from “buy” to “hold” early this morning. It’s a bit of a surprise, given the optimism surrounding the housing market’s recovery, a trend that would no doubt help both these companies shine if it continues. Home Depot does report earnings next week, so investors will get a better chance to judge the stock for itself. Wall Street analysts are projecting earnings of $0.64 per share for the most recent quarter, up from $0.50 a year ago.
Finally, Intel Corporation (NASDAQ:INTC) is leading tech’s retreat today: The chip maker’s stock is down 2.8%. Numerous tech stocks are down, causing the Nasdaq Composite to drop 1.3%. While there hasn’t been any bad news for Intel out today, the company has been feeling the heat from rivals lately.