Dow falls on interest rate fears
The Dow Jones Industrial Average (#Dow30) fell 177 points yesterday -its largest single-day decline in 5 months - on profit-taking ahead the Federal Reserve monetary policy decision and concerns that interest rates will be raised. This is all just knee-jerk stuff of course. The market doesn’t really set much store by such minor changes, but old habits die hard, and a bit of profit-lockdown is never a bad idea. Most US corporate earnings have been pretty impressive, with 77% of companies reporting earnings that exceeded estimates. A minor (and overdue) interest rate rise won’t have any serious impact on their ability to continue flourishing, so this should not be construed as a trend reversal. Non-Farm Payroll data will be released Friday, and if we have learned anything it’s that the market gets terribly excited about this, usually for no reason at all. It’ll go up, it’ll go down (not necessarily in that order) and next week it’ll be right back where it started.