Dow Craters 206 Points, Led Lower by Telecom Sector
Nearly every member of the Dow Jones Industrial Average advanced yesterday. Today, all 30 components fell. Markets for weeks have been anxiously eying the comments that finally came today. Federal Reserve Chairman Ben Bernanke revealed that the central bank will begin to taper its bond-buying program later this year if the economy continues to improve. More importantly, the Fed aims to completely end the $85 billion-per-month easing efforts entirely about a year from now. That didn't sit well with the Dow -- especially the telecom sector -- as the index lost 206 points, or 1.4%, to close at 15,112.
Hewlett-Packard , which was up nearly 2% earlier in the day, ended only slightly in the negative, posting losses less than 0.1%. Sadly, that made HP the Dow's top performer of the day. The resilience to broader declines comes as CEO Meg Whitman shakes up company executives in an effort to continue a turnaround that has sent shares up nearly 80% year to date. Shareholders are starting to trust her intuitions.
Intel shares dropped 1.8% Wednesday, as recent bold moves from some of its closest competitors threaten the company's dominance. Advanced Micro Devices , which will use parts from ARM Holdings, laid out its plans for the server microprocessor market yesterday, and analysts are taking notice, touting the efforts. If successful, the project could take market share from Intel, which currently dominates the area.
Lastly, shares of communications giants AT&T and Verizon Communications both slumped, falling 2.5% and 2.9%, respectively. The telecom sector was the worst-performing sector of the day across the markets. The decline makes particular sense when coupled with DISH Network's decision today to end its bidding war with Japan's SoftBank for Sprint Nextel. It now looks as though SoftBank should be able to acquire Sprint, which will mean more formidable competition for AT&T and Verizon.
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The article Dow Craters 206 Points, Led Lower by Telecom Sector originally appeared on Fool.com.Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.The Motley Fool recommends and owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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