STOCKS FALL AFTER THE FED ENDS OF QE: Here’s What You Need To Know

MYLES UDLAND

 OCT. 30, 2014

EUTERS/Lucas Jackson

Stocks fell after the Federal Reserve announced that it will end its quantitative easing program at the end of this month. The Fed also kept interest rates pegged at 0%-0.25% and said that it expects there will be a “considerable time” between the end of QE and its first interest rate hike.

First, the scoreboard:

• Dow: 16,970, -35, (-0.2%)
• S&P 500: 1,981.7, -3.3, (0.2%)
• Nasdaq: 4,547, -17.4, (-0.4%)

And now, the top stories on Wednesday:

1. QE is over. The Federal Reserve on Wednesday announced that at the end of this month, it will end its quantitative easing program, which included the purchase of Treasury and asset-backed securities. The Fed made its final purchase under the program, which was down to $15 billion a month, earlier this week, and now the countdown is on to the Fed’s first rate hike. In an email following the Fed’s announcement, Chris Rupkey, chief financial economist at MUFG, said he thinks the Fed could raise rates sooner than expected given the strength in the labor market. 

2. Following the announcement, markets sold off, but regained most of those losses and finished slightly lower on the day. The dollar, however, staged a big rally after the announcement, gaining against the yen, the euro, and the pound.

3. In stock news, Facebook was a big loser on Wednesday, falling more than 6% after saying on its Tuesday earnings conference call that 2015 would be a year of investment for the company with expenses expected to rise 50%-70% during the year. But as Business Insider’s Henry Blodget wrote on Wednesday, this is exactly what the company should be doing: investing for the long term. 

4. Also in tech news, IBM and Twitter announced a new partnership wherein IBM will help businesses use Twitter data to understand their customers and other business trends. The deal has three parts, and Business Insider’s Julie Bort has the full breakdown here. 

5. A big loser on Wednesday was Orbital Sciences, which fell more than 15% after its unmanned rocket set to bring supplies to the International Space Station exploded shortly after take off on Tuesday night in Virginia. No one was hurt during the accident, which Orbital said was caused by a “catastrophic failure.”

6. Alibaba shares fell about 1% on Wednesday, but a number of analysts initiated coverage on the stock on Wednesday, and most all of them were giving the Chinese e-commerce giant a big thumbs up. Business Insider’s Jay Yarow has the full rundown of who is saying what about Alibaba, but among the notable comments were those out of JPMorgan, which said the company could be worth up to $178 a share under its “best case” scenario. 

7. Fiat Chrysler shares gained more than 11% on Wednesday after the company said it would spin off its Ferrari unit. Business Insider’s Matthew DeBord has everything you need to know about the move here.