US stocks fell on Friday pilling on a weekly decline of most benchmark indexes as investors continued speculation about the Feds bond buying program being reduced after its next meeting. Financial sector recorded the biggest loss out of 10 other, letting S&P 500 to decline with 2.1%. The index recorded 1% loss for the week and Dow Jones Average lost 1.2%.
The Fed will hold its two-day policy meeting June 18 and 19, as Chairman Ben S. Bernanke is scheduled to speak after the central bank’s decision. Investors are going to follow this event with great interest. Some of them expect this meeting to be crucial to Feds decision about reducing stimulus.
“We’ve had a good year so far and we’re now waiting for the Fed’s response,” David Kelly, the chief global strategist at JP Morgan Funds in New York, said by telephone to Bloomberg.
The stimulus launched by the Fed and some better than forecast earnings have triggered a raise in US stock market for its fifth year. Feds Chairman Ben Bernanke has stated the government would reduce stimulus program only if economy shows improvement in “real and sustainable way.”
In corporate news, KBW Bank Index sank 2.3% for the week as 22 of its 24 components declined. American Express slipped 6.5% to years lowest for the company as Barclays lowered the rating on the credit card issuer predicting slow earnings.
Gannet, the media holding company surged 20% as it was able to acquire Belo for $1.5 billion. The acquisition will double companys TV stations limiting its exposure to the declining newspaper business.
Safeway gained 7.3% as it sold Canadian operations in order to cover debt and buy back shares. Groupon Inc rose 10% as Deutsche Bank upgraded its stocks to “buy” rating expecting company record high sales.
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