The U.S. 30 (underlying Dow Jones Industrial Average) lost around 0.45 percent of its value to the two-week lows of 21309.1 even though U.S. Federal Reserve Chair Janet Yellen said on Tuesday that she does not believe that another financial crisis will occur at least as long as she lives, mainly due to reforms of the banking system since the 2007-09 crash.
For a summary, the NYSE was lower at the close on Tuesday, with Dow Jones Industrial Average falling 0.46 percent, while the S&P 500 down 0.81 percent, and the NASDAQ Composite index declining 1.61 percent.
The biggest gainers of the session on the U.S. 30 were JPMorgan Chase & Co (NYSE:JPM), which rose 0.93 percent or 0.81 points to close at 88.05. Wal-Mart Stores Inc (NYSE:WMT) gained 0.68 percent or 0.51 points to end at 76.01 and Home Depot Inc (NYSE:HD) was up 0.54 percent or 0.82 points to 152.24 in late trade.
The loss of the index was largely propelled by losses in Technology and Communication Service sectors. The biggest losers included Verizon Communications Inc (NYSE:VZ), lost 1.99 percent or 0.91 points to end at 44.84, while Microsoft Corporation (NASDAQ:MSFT) declined 1.87 percent or 1.32 points to 69.21 and Cisco Systems Inc (NASDAQ:CSCO) shed 1.49 percent or 0.48 points to close at 31.76.
Fed’s chair Yellen gave no indication her plans for continued tight monetary policy had shifted while acknowledging that some asset prices had become pretty high. “We’ve made very clear that we think it will be appropriate to attainment of our goals to raise interest rates very gradually,” she said this time in London.
However, the general loss of U.S. equity market was largely influenced by her speech, as the rate hike plan seems in a rush, an opinion from Neel Kashkari, Minneapolis Fed President. With inflation low and wages showing little sign of an upward surge, the U.S. Reserve action on raising interest rates may be inappropriate to current economy which has no sign of overheat.
“Why are we trying to cool down the economy, when there may still be some slack in the job market, and there is still some room to run on the inflation front?” he said. “We’re not seeing wages climb very fast, and we’re not seeing inflation. That tells me the economy is not on the verge of overheating.”
Technically intraday trading is at 21322.6 as of 2:50 p.m. in Sydney, and retracing its gains to 20-day moving average, which generally is seen as a support level by investors. As it is gathering a descending momentum in the near term from the record high, a downside may not shift if breakout of MA20 occurs.
Chart 1: US30USD Daily
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