U.S. stocks dip as market preps for Fed tapering; Dow down 0.43%

U.S. stocks dip as market preps for Fed tapering; Dow down 0.43%

Investing.com – U.S. stocks fell on Thursday after better-than-expected economic growth and weekly jobless claims reports sent investors bracing for a Federal Reserve announcement to pare back monthly bond purchases in the coming months.

Stimulus tools such as the Fed's USD85 billion in monthly bond purchases drive down interest rates to spur recovery, boosting stock prices in the process, though talk of their dismantling can dampen stock prices by fanning uncertainty as to how equities will perform without a monetary crutch.

At the close of U.S. trading, the Dow Jones Industrial Average finished the day down 0.43%, the S&P 500 index also fell 0.43%, while the Nasdaq Composite index fell 0.12%.

Better-than-expected growth and jobs data out of the U.S. bolstered the dollar and the 10-year Treasury yield while watering down stock prices on expectations that the Fed will soon scale back monthly bond purchases.

The U.S. gross domestic product increased at a seasonally adjusted annual rate of 3.6% in the three months to September, well above expectations for 3.0% growth and up from a preliminary estimate of 2.8%, according to Commerce Department data released earlier. 

Separately, the U.S. Department of Labor said the number of individuals filing initial jobless claims last week fell by 23,000 to a seasonally adjusted 298,000 from 321,000 in the previous week, whose figure was revised up from 316,000. 

Analysts had expected initial jobless claims to rise to 325,000 last week. 

Government data also showed that U.S. factory orders fell 0.9% in October, less than an expected 1% decline after an upwardly revised 1.8% increase the previous month.

Leading Dow Jones Industrial Average performers included Intel, up 2.25%, Boeing, up 0.91%, and Caterpillar, up 0.52%.

The Dow Jones Industrial Average's worst performers included Microsoft, down 2.40%, JPMorgan Chase, down 2.37%, and Goldman Sachs, down 1.88%.

European indices, meanwhile, finished lower.

After the close of European trade, the EURO STOXX 50 fell 1.17%, France's CAC 40 also fell 1.17%, while Germany's DAX 30 fell 0.61%. Meanwhile, in the U.K. the FTSE 100 finished down 0.18%.

On Friday, markets will move on the release of the U.S. November jobs report and also on the Thomson Reuters/University of Michigan preliminary consumer sentiment index.