Stocks dip as Fed fails to deliver growth plan

Dow Jones: 11,295.81 (–119.05) Nasdaq: 2,529.14 (–19.80) SP 500: 1,185.90 (–12.72):US STOCKS fell yesterday, after the biggest advance in two weeks for benchmark gauges, as Federal Reserve Chairman Ben Bernanke failed to offer any specific new plans to bolster growth in the world's largest economy.

Financial and industrial shares had the biggest losses among 10 groups in the Standard and Poor’s 500Index.

The Dow Jones industrial average dropped 119.05 points, or 1.04 per cent, to 11,295.81.

The Standard Poor’s 500 Index fell 12.72 points, or 1.06 per cent, to 1,185.90.

The Nasdaq Composite Index lost 19.80 points, or 0.78 per cent, to 2,529.14.

Stocks extended losses as Mr Bernanke stopped short of signalling what he thinks is the Fed’s best option to aid the economy, repeating points from his speech on August 26th in Jackson Hole, Wyoming.

“It’s a little disappointing,” Bruce McCain, who helps oversee $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said.

“Like he didn’t even care to put anything new out there. Investors are grasping for some clear indication of where we are going to be moving and there just isn’t enough to provide that clarity,” he said.

Mr Obama plans to unveil his proposals for promoting job growth in an address to a joint session of Congress.

While Mr Bernanke said Congress and Mr Obama must put the federal government’s finances on a “sustainable trajectory” over the long term, he warned that policy makers should not disregard the “fragility” of the economic recovery.

The Fed chief also said policy makers will discuss the tools they could use to boost the recovery at their next meeting this month and stand ready to use them if necessary,” he said .

JPMorgan lost 3.7 per cent to $33.52. Boeing declined 3.4 per cent to $62.68. Freeport retreated 2.2 per cent to $44.19.

Dollar General lost 5.9 per cent to $34.95. The store chain said in a regulatory filing that holders will sell 25 million shares.

Yahoo! rose 3.6 per cent to $14.09. Third Point disclosed that it had bought a 5.2 per cent stake and sent a letter urging board members to resign, saying directors diminished shareholder value – (Bloomberg/Reuters)