Wall Street falls as Bernanke's comments weigh
By Caroline Valetkevitch | November 21, 2012 6:00 AM EST
Stocks slid as Federal Reserve Chairman Ben Bernanke's comments added to worries about the economic impact of the U.S. "fiscal cliff" and Hewlett-Packard's stock sank on news of an $8.8 billion accounting charge.
Bernanke, in comments before the Economic Club of New York, said the Fed does not have the tools to offset the damage that would result if politicians fail to strike a deal to prevent going off the fiscal cliff. If a solution isn't approved in time, then mandatory tax increases and spending cuts will go into effect early next year. Bernanke said he does not believe the possible benefits of cutting the interest it pays on bank reserves are sufficient to outweigh the risk of trouble in money markets.
"In the short run, we're hostage to the fiscal cliff. I think (Bernanke's) got to be really, really fearful that Washington doesn't get its act together and that creates stresses on the financial system," said Dan Veru, chief investment officer of Palisade Capital Management in Fort Lee, New Jersey.
Stocks rallied for the last two sessions on optimism that Washington politicians could agree on a deal to avoid the U.S. fiscal cliff. But the gains followed two weeks of sharp losses.
Hewlett-Packard Co shares
The Dow Jones industrial average <.DJI> was down 63.43 points, or 0.50 percent, at 12,732.53. The Standard & Poor's 500 Index <.SPX> was down 5.78 points, or 0.42 percent, at 1,381.11. The Nasdaq Composite Index <.IXIC> was down 15.01 points, or 0.51 percent, at 2,901.06.
Another factor weighing on stocks was Moody's Investors Service's reduction of France's sovereign rating by one notch to Aa1 after the market's close on Monday. Moody's cited an uncertain fiscal outlook as a result of the weakening economy.
(Additional reporting by Chuck Mikolajczak Editing by Jan Paschal)
Most Popular Slideshows
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
- 2014 MLB World Series Game 3: Kansas City Royals 3, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- Verizon Motorola Droid Turbo Leaked Live Images Surfaces, Scheduled To Get Unveiled On Oct 28
- Update HTC One M7 with LG G2 with Android 4.4.2 as Sprint OTA: Fixes and Installation
- U.S. Targets Buyers of ISIS Oil, Threatens Sanctions
- ISIS Syria Airstrike Bombing Has Killed 550 People, Civilians Included
- Russia Blocking OSCE Monitoring Of Its Border With Ukraine
- Russia Slams US 'Double Standards' In The Fight Against ISIS