US stocks plunged as investors are concerned

June 5, 2013 6:50 am

US stocks fell ceasing its 20 straight Tuesday streak for the Dow Jones Industrial Average, as speculation of Fed reducing the bond buying program as soon as September, appeared. Dow Jones plunged 76.49 points which represents 0.5%. The S&P 500 index fell 0.6% to 1631.38 offsetting earlier gains. Exchanging volume was 7.6% greater than previous three months.

Some analysts have stated fears of bigger stock volatility that may happen if change in stimulus program is to be made right now. The Fed officials has been voicing mixed statements and opinions during last month. There has been a debate between the presidents of Federal banks. The Fed Bank of Kansas City President Esther George has been a fierce opponent of continuing the stimulus program at almost every meeting. San Francisco President John Williams said yesterday he expects a “modest adjustment downward” happening as early as this summer. On the opposite side was the opinion of Atlanta Fed President Dennis Lockhart who defined economic data as “mixed” and calls for cautiousness considering the recent condition of economy.

Economist from Goldman Sachs and Deutsche Bank predicted that government would start to tapper on stimulus this summer. According to several specialists economic signals could define how soon the reduction would be made. Investors would heavily rely on this week’s information about the growth of payrolls in May.

In corporate news, Exxon Mobile Corp. and Chevron Corp. dropped 0.9% as energy sector plunged. AT&T jumped by 1.7% as phone companies rallied 0.9%. Monster Beverage Corp. the largest US energy drink maker gained the most in the S&P 500, adding 10%. Corona the beer maker based in California added 9%. Last two companies could be influenced by seasonal changes in sales. Intel Corp. advance by 0.5% as the index of chip makers rose 0.5%. General Motors jumped by 1.6% to $34.96 after S&P 500 decided to include the index at the place of H.J. Heinz as the food producer company has been acquired recently.

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