Wall Street dips as Fed makes no major policy changes

on August 01 2012 3:11 PM

Stocks fell slightly on Wednesday after the Federal Reserve announced no significant monetary policy changes.

The news was a mild disappointment for stock markets, which had run up towards the end of July on hopes that some further stimulus might be in store. The central bank said it would continue to monitor economic data and would "provide additional accommodation as needed."

"They did absolutely nothing here. It suggests there is a lot of internal debate going on in the Fed," said Steven Ricchiuto, chief economist at Mizuho Securities in New York.

The Dow Jones industrial average .DJI was down 40.11 points, or 0.31 percent, at 12,968.57. The Standard & Poor's 500 Index .SPX was down 4.60 points, or 0.33 percent, at 1,374.72. The Nasdaq Composite Index .IXIC was down 16.41 points, or 0.56 percent, at 2,923.11.

The European Central Bank will meet on Thursday. Last week ECB President Mario Draghi heightened speculation of further ECB purchases of Italian and Spanish bonds by saying he would do "whatever it takes to preserve the euro." However, the German Bundesbank has already indicated its lack of support for such a plan.

A computer glitch at market maker Knight Capital (KCG.N) caused a surge in volume in about 150 shares at the market's open.[ID:nL2E8J10MO] Knight said in a statement that it was advising traders to execute their trades elsewhere, and the company's shares were hammered, falling 23 percent to $7.87, at one point hitting a seven-year low of $7.62.

The NYSE is reviewing trades for 140 stocks and halted trade on a handful of stocks. These included Dow industrials General Electric (GE.N) and Alcoa (AA.N).

Other news, such as stronger-than-expected jobs numbers from the private payroll group ADP and manufacturing data took a backseat as traders hustled to execute trades during the technical trouble.

More News from IBT MEDIA