Stocks in US fall; Fed to keep buying bonds

NEW YORK: United States stocks fell on Friday as investors puzzled over the Federal Reserve’s decision to maintain its stimulus measures as they heard opposing views from top Fed officials.

Despite lower closes in the past two sessions, the major stock indices ended higher for the week. The Dow rose 0.6%, the S&P gained 1.3% and the Nasdaq advanced 1.4%.

On Wednesday, the Fed surprised economists and investors with its decision to delay scaling back its stimulus.

St. Louis Federal Reserve Bank President James Bullard said a reduction of the Fed’s $85 billion monthly bond purchase programme beginning in October was possible. Mr Bullard later said in New York that low inflation meant the Fed can be patient in deciding when to scale back its pace of asset purchases.

But Kansas City Federal Reserve Bank President Esther George sharply criticised her colleagues’ decision not to reduce the Fed’s bond-buying programme, warning it sowed confusion and risked the US central bank’s credibility.

Two companies made their stock market debuts with initial public offerings and achieved stellar results.

FireEye shares opened 101.5% above the IPO at $40.30 and closed up 80% to $36. Rocket Fuel also more than doubled in its trading debut, and ended the session up 93.4% to $56.10.

Caterpillar Inc was down 3.4% to $84.75 while US-listed shares of BlackBerry Ltd plunged 17.1% to $8.73.

The Dow Jones industrial average fell 185.46 points or 1.19%, to 15,451.09, the S&P 500 lost 12.42 points or 0.72%, to 1,709.92 and the Nasdaq Composite dropped 14.656 points or 0.39%, to 3,774.728.

Volume was heavier than usual as Friday marked ‘‘quadruple witching’’ day when stock index futures, stock index options, stock options and single stock futures all expire on the same day. Trading is up as investors replace or repurchase existing contracts.