September 23, 2009

U.S. markets drop on Fed announcement

U.S. markets dove late in the trading session after the U.S. Federal Reserve said it would keep lending rates unchanged.

The Fed left bank-to-bank lending rates at zero to 0.25 percent and said it would maintain its goal of buying $1.25 trillion in mortgage-backed securities and agency debt.

Although the Fed said economic activity has picked up following it severe downturn, the announcement sent stocks sharply downward. The Dow Jones industrial average, within 100 points of 10,000 at 3 p.m., lost more than 150 points by the close of trading.

The DJIA closed down 81.32 points, 0.83 percent, to 9,748.55. The Standard & Poor's 500 lost 1.01 percent, 10.79 points, to 1,060.87. The Nasdaq composite index dropped 0.69 percent, 14.88 points, to 2,131.42.

On the New York Stock Exchange, 1,063 stocks advanced and 1,958 declined on a volume of 5.5 billion shares traded.

The benchmark 10-year Treasury rose 7/32 to yield 3.417 percent.

The euro fell to $1.473 from Tuesday's $1.443. Against the yen, the dollar rose to 91.32 yen from Tuesday's 91.31 yen.

The stock market in Japan was closed for a holiday.

In Britain, the FTSE 100 index lost 0.06 percent, 3.23 points, to 5,139.37.