Jan 29 - The Dow slumped to new lows of the year as the Federal Reserve stuck to reducing its bond-buying program, even as emerging markets tumble. Conway G. Gittens reports.
Stocks get slammed with investors tangled up by worries about emerging markets and how Federal Reserve policy may be impacted. The Dow finished lower for the seventh time in six sessions and the broader market - down a full percent. In a unanimous decision, the Federal Reserve keeps swinging the policy knife, trimming its monthly bond buying program by another $10 billion. Slower than expected job growth in December - not enough to stop Ben Bernanke from staying the course in his final meeting as head of the world's most powerful central bank. As part of its decision, the Fed says "economic activity picked up in recent quarters." But it's what the Fed did not say that has Hilary Kramer of A&G Capital concerned. SOUNDBITE: HILARY KRAMER, PRESIDENT/CHIEF INVESTMENT OFFICER, A&G CAPITAL (ENGLISH) SAYING: "Why didn't the Fed talk about the weather and the impact on the economy? Why did the Fed avoid talking about emerging markets? Turkey? Any potential bank failures in China?" By leaving things like that out - some believe the Fed is sending a message about the fragility of the tapering program and maybe even the economy. In Europe, a rally sparked by a rate hike in Turkey was short lived as emerging markets headed south once again.