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U.S. stocks slide despite Fed's Operation Twist

(Xinhua)

09:55, September 22, 2011

NEW YORK, Sept. 21 (Xinhua) -- U.S. stocks slid on Wednesday, with major indexes closing at session lows, even after the Federal Reserve announced measures known as "Operation Twist" to drive down long-term interest rates.

After a two-day policy meeting, the Federal Open Market Committee announced on Wednesday that it decided to purchase, by the end of June 2012, 400 billion dollars of Treasury securities with remaining maturities of six years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less.

The FOMC also said in its statement that "to help support conditions in mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities."

The measures, highly-anticipated by Wall Street, were relatively bold moves by the central bank in order to give the sluggish economy a boost. However, it failed to lift the market.

Meanwhile, the debt situation in Europe still weighed on the market. With discussions to provide additional bailout funds for Greece still going on, investors hope Greece can get the next batch of bailout money as soon as possible to avert a default. However, many traders became more and more pessimistic about the outlook. Mark Otto, a trader in NYSE, told Xinhua he believed Greece will have to default on its debt sooner or later.

As of Wednesday's close, the Dow Jones industrial average tumbled 283.82 points, or 2.49 percent, to 11,124.84. The Standard & Poor's 500 plunged 35.33 point, or 2.94 percent, to 1,166.76. The Nasdaq Composite Index lost 52.05 points, or 2.01 percent, to 2,538.19.

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