Wall Street logs 3-day losing streak amid Fed policy uncertainty

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Wall Street logs 3-day losing streak amid Fed policy uncertainty

(Xinhua) 14:42, September 24, 2013

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U.S. stocks fell for the third straight session on Monday, as investors tried to digest a batch of speeches from Federal Reserve officials and weigh a looming budget fight in Washington.

The Dow Jones Industrial Average lost 49.71 points, or 0.32 percent, to 15,401.38 points. The S&P 500 was down 8.07 points, or 0.47 percent, to 1,701.84 points. The Nasdaq Composite Index shed 9.44 points, or 0.25 percent, to 3,765.29 points.

Fed officials were divided on whether the U.S. central bank should delay tapering its quantitative easing in its September policy meeting.

New York Fed President William Dudley on Monday defended the Fed's surprise decision last week not to trim its massive asset purchases, saying progress had been made but not enough to begin tapering.

Also on Monday, Atlanta Fed President Dennis Lockhart said there is some evidence that the U.S. economic dynamism is declining and losing its "economic mojo."

However, Dallas Fed President Richard Fisher noted the Fed's latest decision to keep its bond purchase programs intact has hurt its credibility.

The looming U.S. debt ceiling wrangling also added negative sentiment to the market. The U.S. Treasury Department has said that the government's debt limit needs to be raised by mid-October.

On the economic front, the Chicago Fed National Activity Index, a gauge of the U.S. overall economic activity, rose to 0.14 in August from minus 0.43 in July.

"A tick-up in the August led by manufacturing is encouraging. But what we want to see is a more comprehensive and sustainable recovery," Mei Li, an economic analyst at FTN Financial, said on Monday.

Most major S&P sectors drifted lower, led by financials. "Given that the financial sector is the largest of any of the major S&P sectors, this kind of deterioration continues to be a headwind to stocks in general," said Mark Newton, the chief technical analyst at Greywolf Execution Partners Inc.

The CBOE Volatility Index, widely considered as a fear gauge of the market, soared 9.07 percent to end at 14.31.

In corporate news, Microsoft shares inched down 0.16 percent to 32.74 U.S. dollars after the tech giant unveiled its next generation Surface tablet, Surface Pro 2.

In other markets, light, sweet crude for November delivery decreased 1.16 dollars to settle at 103.59 dollars a barrel on the New York Mercantile Exchange, while Brent crude for November delivery lost 1.06 dollars to close at 108.16 dollars a barrel.

Gold futures for December delivery on the COMEX division of the New York Mercantile Exchange dropped 5.5 dollars to settle at 1, 327 dollars per ounce as Citigroup and Morgan Stanley remain pessimistic about the future of the precious metal.

The U.S. dollar weakened against most major currencies. In late New York trading, the dollar bought 98.84 Japanese yen, lower than 99.36 yen of the previous session.