Dow pulls back for third day in a row

The latest Fed official to speak has not acted to reassure the market, as fears of early tapering continue to unsettle investors.

It’s been falling stock index levels in the US all this week so far, with the Dow Jones down 0.25% or 38 points at 15,480 in the last hour of trading in New York. The S&P 500 slipped around the same percentage to stand at 1692.6, while the NASDAQ 100 shed just 0.12% of its value to fall to 3119.7.

Around 86% of the stocks in the S&P 500 have now reported, with a respectable two thirds having beaten analyst expectations, but with the reporting season now petering out, the sentiment of the market is being dictated by what the Fed is expected to do with its monthly asset purchases.

While the last FOMC statement contained no hints on tapering, remarks from various Fed officials this week have fuelled speculation that the central bank might announce a reduction in the pace of its monthly asset purchases. Sandra Pianalto, the President of the Cleveland Fed, delivered a speech today in which she said bond purchases could be reduced if the job market continues to improve in the way it has over the past year, but mentioned no time frames.

US consumer credit grew $13.8 billion in June, a slower pace than had been expected. May’s increase was downwardly-revised from the previously-reported $19.6 billion to $17.5 billion. We have US initial jobless claims data out tomorrow, with 336,000 new claimants expected, according to a survey conducted by Reuters. The overall trend has been one of an improving job market, with the four-week average down near recovery lows.

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