Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Dow Drops on Fed Report

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

After reaching a new five-year high yesterday, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) retreated late in the session after a Federal Reserve meeting, falling 108 points, or 0.8%, on the day. The S&P 500 and Nasdaq were down sharply as well, both dropping by more than 1.2%.

The Fed released the minutes from its Open Market Committee meeting at 2 p.m., which revealed that many of the committee's members favored stopping or slowing down the central bank's bond-buying program to control costs incurred from the asset purchases. Since the Fed first began its quantitative easing program in 2008, the market has consistently cheered the its stimulus actions, which feed money into the economy and the stock market. So it's not a surprise to see the market heading south now that the Fed may be getting cold feet. Chairman Ben Bernanke had before said that the bond buying will continue until unemployment goes down to 6.5% or inflation increases significantly.

Housing starts in January also disappointed, falling 8.5% to 890,000 from 973,000 in December. Still, the January total was improved from a year ago, and the housing market appears to be on the right track as building permits were better than expected.

For the second day in a row, Alcoa (NYSE: AA  ) was the biggest loser in the Dow as reports came in that the worldwide aluminum glut seems to be getting worse. Inventories in a key area of China grew by about 50% to 1.2 million metric tons. Demand in the world's No. 2 economy, one of Alcoa's primary's markets, has not kept up with the increased supply, and Alcoa has struggled to turn a profit lately as prices have been forced down from the excess supply. Today's news seems to indicate that the aluminum maker's fortunes will not be changing anytime soon.

UnitedHealth (NYSE: UNH  ) shares were also off 2.6% as the federal government said it may cut payouts for Medicare Advantage by more than 2% in 2014, which some analysts called "unfavorable" for the insurance providers.

Boeing (NYSE: BA  ) shares were up over 1% most of the day as the aircraft maker said it had found a solution for its Dreamliner battery fire problems, but fell late in the session after Qantas said it received $308 million in compensation from Boeing for delays in Dreamliner orders and scrapped orders for 35 of the new jets. As for the battery fixes, a Boeing team is set to meet with the Federal Aviation Administration. Boeing finished the session up 0.2%.

Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Representing 14.7% of 2011 global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160B by 2017. Based on this prospective and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant simply click here to get started.

Read/Post Comments (1) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2267788, ~/Articles/ArticleHandler.aspx, 9/28/2016 9:37:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,339.24 110.94 0.61%
S&P 500 2,171.37 11.44 0.53%
NASD 5,318.55 12.84 0.24%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 5:27 PM
^DJI $18339.24 Up +110.94 +0.61%
AA $9.88 Up +0.23 +2.38%
Alcoa CAPS Rating: ***
BA $132.23 Up +0.91 +0.69%
Boeing CAPS Rating: ****
UNH $140.41 Down -0.38 -0.27%
UnitedHealth Group CAPS Rating: ****