Skepticism about the Fed's $200 billion liquidity plan, and another record closing high for oil, dragged the market lower WednesdayMajor U.S. stock indexes closed lower Wednesday as trading turned more cautious after the market's huge rally in the previous session. Market observers tied Wednesday’s retreat to profit taking and mixed opinions about the Federal Reserve's recent steps to help ease the credit crisis. Also causing uneasiness among investors: crude oil prices, which fanned inflation fears by heading deeper inside record territory.
Bonds rallied as the Fed is now seen cutting rates 50 basis points next Tuesday instead of 75 basis points, as the central bank uses various tools to combat current liquidity problems. The dollar was lower, while gold prices rose.
On Wednesday, the Dow Jones industrial average finished lower by 46.57 points, or 0.38%, at 12,110.24. The broader S&P 500 index fell 11.88 points, or 0.90%, to close at 1,308.77. The tech-heavy Nasdaq composite index shed 11.89 points, or 0.53%, to end the session at 2,243.87.
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