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U.S. stocks open sharply lower on Fed; Dow Jones tumbles 1.12%

Stock MarketsJun 20, 2013 09:44AM ET
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Investing.com - U.S. stocks opened sharply lower on Thursday, as comments by Federal Reserve Chairman Ben Bernanke signalling a possible near-term end to the Federal Reserve weighed despite the release of downbeat U.S. jobless data.

During early U.S. trade, the Dow Jones Industrial Average tumbled 1.12%, the S&P 500 index plummeted 1.25%, while the Nasdaq Composite index declined 1.15%.

The Department of Labor said the number of individuals filing for initial jobless benefits last week rose by 18,000 to a seasonally adjusted 354,000, a three-week high, compared to expectations for an increase of 4,000 to 340,000.

Stocks came under pressure earlier after Fed Chairman Ben Bernanke on Wednesday said the bank could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as the central bank expects.

Sentiment was also hit after data earlier showed that China’s HSBC preliminary manufacturing purchasing managers’ index fell to a nine month low of 48.3 in June from 49.2 in May as new orders fell, indicating that the slowdown in manufacturing is worsening.

Microsoft shares tumbled 1.45% amid reports the tech giant had planned to acquire Finland's Nokia, but talks broke down.

Separately, Microsoft announced a major change to its Xbox One late Wednesday, saying it will no longer require an internet connection to play offline games.

Adding to losses, Men’s Wearhouse retreated 1.54%, after the company ousted its founder and exectutive chairman George Zimmer following repeated clashes over strategy with Chief Executive Officer, Douglas Ewert.

Elsewhere, Jabil Circuit plunged 4.09% after reporting late Wednesday a steep drop in quarterly profits.

On the upside, Facebook added 0.25% as it was preparing to host a press event at its headquarters on Thursday. The social network giant was widely expected to announce a video function for its photo-sharing app, Instagram.

Other stocks in focus included Oracle, scheduled to post earnings after the closing bell.

Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 plummeted 2.51%, France’s CAC 40 plunged 2.55%, Germany's DAX retreated 2.45%, while Britain's FTSE 100 tumbled 2.30%.

During the Asian trading session, Hong Kong's Hang Seng Index sank 2.88%, while Japan’s Nikkei 225 Index tumbled 1.74%.

Later in the day, the U.S. was to release data on existing home sales and the Philly Fed manufacturing index.

U.S. stocks open sharply lower on Fed; Dow Jones tumbles 1.12%

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