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US: Stocks slide as Fed keeps rate hike prospects alive
[NEW YORK] US stocks finished firmly lower on Wednesday after the Federal Reserve suggested more interest rates were possible in 2016 despite economic uncertainty that has roiled markets.
The Dow Jones Industrial Average fell 222.77 points (1.38 per cent) to 15,944.46 The broad-based S&P 500 dropped 20.68 (1.09 per cent) to 1,882.95, while the tech-rich Nasdaq Composite Index slumped 99.51 (2.18 per cent) to 4,468.17.
The Fed, concluding its first policy meeting since an historic decision to hike rates in December, said US growth slowed late last year and hinted at more worries about global economic weakness as it kept its benchmark interest rate unchanged.
But the policymakers of the Federal Open Market Committee said they expected inflation, weakened by the slide in oil prices, would rise toward the 2.0 per cent target in the medium term, leaving the door open for a second rate increase in March.
Mace Blicksilver, director of Marblehead Asset Management, said investors were hoping for a more dovish statement from the US central bank.
"There's a lot of unrealistic expectations," he said. "There were some irrational expectations that (Chair) Janet Yellen was going to apologise for the December rate increase and promise never to raise rates ever again in anyone's lifetime."
Apple tumbled 6.6 per cent after the tech giant reported only minimal growth in iPhone sales, its main money-maker, in its fiscal first quarter and forecast the first decline ever in iPhone sales in the current second quarter.
The weak Apple report also sparked a retreat in most other leading technology equities. Facebook fell 3.0 per cent, while Google parent Alphabet and Microsoft both lost 1.8 per cent. Netflix slid 6.8 per cent.
Boeing plunged 8.9 per cent after projecting a drop in 2016 commercial aircraft deliveries and earnings below analyst expectations. The weak outlook sparked fears of slowing demand for new airplanes.
Dow members ExxonMobil and Chevron lost a respective 1.8 per cent and 1.0 per cent, but other petroleum producers rose as oil prices gained. ConocoPhillips climbed 2.4 per cent and Anadarko Petroleum 2.7 per cent.
US-traded Fiat Chrysler Automobiles shares slid 2.1 per cent after the Italian automaker reported 2015 net profit well below expectations and down 40 per cent from a year ago due to a poor performance in Brazil, Argentina and China.