Dow down big on Yellen's first day


McClatchy Washington Bureau

How'd your first day on the job go, Janet Yellen?

The Dow Jones industrial average plunged more than 326 points Monday, an auspicious start of Janet Yellen's first day on the job as chair of the Federal Reserve.

The Dow closed off 326.05 points, or more than 2 percent, to 15,372.80. The S&P 500 was down 40.70 points to 1741.89 and the NASDAQ dropped 106.92 points, or 2.6 percent, to end at 3996.96.

Stocks dipped sharply after a weak report on manufacturing, coming on the heels of other recent soft data and a dismal December jobs report. It all puts a heightened expectation on January hiring numbers, due out from the Labor Department on Monday.

Monday marked the seventh time since the start of 2014 that stocks posted triple-digit daily losses. And with major indices having lost 5 percent or more of value this year, there are questions on Wall Street as to whether a correction is afoot.

In a bull market, where stocks have run ahead of that should be their fair value, a correction is defined as a 10 percent correction in price.

It all serves to underscore the job awaiting Janet Yellen as the new Fed chair. In the number-two position, she was deeply involved in launching a program of purchasing government and mortgage bonds to stimulate the economy. Stocks have been one of the biggest winners under the program, which flattens returns on bonds and drives investors into stocks in search of bigger profits.

But in January, the Fed began tapering back its purchases, repeating it again in February. Investors are fretting the possibility that stocks will lose their sugar high under Yellen in months ahead, and that the market must find a new floor for prices.

Coming days should give more sense of whether there is a correction, meaning stock prices had been inflated, or whether it is just investors selling off to lock in gains much like pruning back a bush.



Read more National Business stories from the Miami Herald

  • Kraft recalls 96,000 pounds of Oscar Mayer wieners

    Kraft Foods is recalling 96,000 pounds of its Oscar Mayer wieners because they may mistakenly contain cheese.

  • Documents link state-sponsored company, pipeline

    A state-sponsored company that directed millions of dollars from foreign investors to the idled Northern Beef Packers plant and other projects in South Dakota before running afoul of authorities also attempted to help finance the now-stalled Keystone XL oil pipeline, documents show.

The Ford Escort sedan is unveiled during press day at the China Auto show in Beijing, China, Sunday, April 20, 2014. Ford Motor Co. on Sunday unveiled a new Escort sedan designed in China for global sale at a Beijing auto show that highlighted the growing influence of Chinese tastes on the industry.

    Automakers unveil China-focused models in Beijing

    Ford Motor Co. on Sunday unveiled a new Escort sedan designed in China for global sale at a Beijing auto show that highlighted the growing influence of Chinese tastes on the industry.

Miami Herald

Join the

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category