Yesterday, US Stock markets suffered their worst drop in a month after the Federal Reserve said there were “significant downside risks” to the economy even as it took another stab at boosting growth.
The Dow Jones industrial average dropped 283.82 points, or 2.49%, to 11,124.84. The Standard & Poor’s 500 Index lost 35.33 points, or 2.94%, to 1,166.76. The Nasdaq Composite Index fell 52.05 points, or 2.01%, to 2,538.19.
The Fed, as expected, said it would buy more long-term Treasury securities in an effort to lower borrowing rates. But investors worry that the Fed’s latest plan will have little effect on lending in an economy that appears to be stagnating, which the Fed also noted.
“That was probably the biggest statement when he said ‘significant downside risks,’” said Alan Valdes, director of floor operations for DME Securities in New York. “Considering we’ve done over $1 trillion, and it hasn’t moved the needle at all,” he added, referring to the Fed’s previous stimulus efforts.
To Read Complete FOMC Statement September 21, 2011 Click Here
