Investing.com - U.S. stocks dropped on Thursday after better-than-expected retail sales numbers fanned expectations for the Federal Reserve to begin winding down its USD85 billion in monthly bond purchases possibly as early as next week.
Fed asset purchases drive down interest rates to spur recovery, boosting stock prices in the process, and talk of their dismantling can dampen stock prices by fanning uncertainty as to how equities will perform without a monetary crutch.
At the close of U.S. trading, the Dow Jones Industrial Average fell 0.66%, the S&P 500 index fell 0.38%, while the Nasdaq Composite index fell 0.14%.
U.S. stocks took a noted dive earlier though they did recover some losses after the Commerce Department reported that U.S. retail sales rose 0.7% in November, beating market expectations for a 0.6% increase.
Core retail sales, which are stripped of automobiles, rose 0.4%, well above forecasts for a 0.2% increase.
The data kept expectations strong that the Federal Reserve will soon decide to taper its USD85 billion in monthly bond purchases, possibly at its Dec. 17-18 policy meeting if not in early 2014.
Elsewhere, the U.S. Department of Labor said the number of individuals filing for initial jobless claims last week rose to a two-month high of 368,000, far surpassing expectations for an increase to 320,000 from the previous week’s revised total of 300,000.
Markets shrugged off the news, attributing the increase to holiday volatility typical this time of year, while a budget deal underway in the U.S. Congress also sent stocks falling amid sentiments that fiscal uncertainties may fade and further convince the Fed the economy is in less need of monetary support.
Leading Dow Jones Industrial Average performers included Exxon Mobil, up 1.15%, Goldman Sachs, up 0.44%, and JPMorgan Chase, up 0.42%.
The Dow Jones Industrial Average's worst performers included Coca-Cola, down 2.28%, Johnson & Johnson, down 2.11%, and Procter & Gamble, down 2.05%.
European indices, meanwhile, finished lower.
After the close of European trade, the EURO STOXX 50 fell 0.64%, France's CAC 40 fell 0.43%, while Germany's DAX 30 fell 0.66%. Meanwhile, in the U.K. the FTSE 100 finished down 0.96%.
On Friday, the U.S. is to round up the week with data on producer price inflation.
Fed asset purchases drive down interest rates to spur recovery, boosting stock prices in the process, and talk of their dismantling can dampen stock prices by fanning uncertainty as to how equities will perform without a monetary crutch.
At the close of U.S. trading, the Dow Jones Industrial Average fell 0.66%, the S&P 500 index fell 0.38%, while the Nasdaq Composite index fell 0.14%.
U.S. stocks took a noted dive earlier though they did recover some losses after the Commerce Department reported that U.S. retail sales rose 0.7% in November, beating market expectations for a 0.6% increase.
Core retail sales, which are stripped of automobiles, rose 0.4%, well above forecasts for a 0.2% increase.
The data kept expectations strong that the Federal Reserve will soon decide to taper its USD85 billion in monthly bond purchases, possibly at its Dec. 17-18 policy meeting if not in early 2014.
Elsewhere, the U.S. Department of Labor said the number of individuals filing for initial jobless claims last week rose to a two-month high of 368,000, far surpassing expectations for an increase to 320,000 from the previous week’s revised total of 300,000.
Markets shrugged off the news, attributing the increase to holiday volatility typical this time of year, while a budget deal underway in the U.S. Congress also sent stocks falling amid sentiments that fiscal uncertainties may fade and further convince the Fed the economy is in less need of monetary support.
Leading Dow Jones Industrial Average performers included Exxon Mobil, up 1.15%, Goldman Sachs, up 0.44%, and JPMorgan Chase, up 0.42%.
The Dow Jones Industrial Average's worst performers included Coca-Cola, down 2.28%, Johnson & Johnson, down 2.11%, and Procter & Gamble, down 2.05%.
European indices, meanwhile, finished lower.
After the close of European trade, the EURO STOXX 50 fell 0.64%, France's CAC 40 fell 0.43%, while Germany's DAX 30 fell 0.66%. Meanwhile, in the U.K. the FTSE 100 finished down 0.96%.
On Friday, the U.S. is to round up the week with data on producer price inflation.