Stock Market plunges on fears that the QE junkies are going to be weaned off their habit

[marmar]

(MoneyWatch) Although Federal Reserve pledged Wednesday not to take away the easy-money punch bowl immediately, Chairman Ben Bernanke said the central bank would likely begin easing back on its stimulus later in the year. That sent a chill of fear through the markets.

The Dow Jones industrial average plunged 206 points to 15,112 points at the close. The Standard & Poor's 500 index lost 22 points, or 1.3 percent, to 1,628. The Nasdaq Composite fell 38 points to 3,443.

The yield on the 10-year Treasury note surged to 2.33 percent from 2.21 percent as traders sold the bonds. The dollar rose.

Bernanke and the Federal Open Market Committee, the Fed's monetary policy panel, offered an upbeat tone on the economy, but stocks immediately began their plunge as the Fed chairman told reporters of a rough outline for the end of the Fed's stimulus efforts, with bond purchases likely to end sometime in the middle of next year. .................(more)

The complete piece is at: http://www.cbsnews.com/8301-505123_162-57590128/bernanke-sends-stocks-bonds-skittering/

[Recursion]

1. I get tired of people trying to "explain" changes within a stochastic process's variance

But, there's no stopping that.

[SoCalDem]

2. Whaaaaaaat? No free money forever?

whodathunkit

[Warpy]

3. Some fool at the Fed said some fool thing this afternoon

Shortly after 2:30, the dollar shot up and the market cratered.

The dollar goes up, foreign investors sell. The dollar goes down, they buy.