THE GUARDIAN
US stock markets slump after Bernanke drops hint on ending stimulus
US stock markets plummeted Thursday amid fears that the Federal Reserve was preparing to scale back its $85bn-a-month stimulus program.The Dow closed down 353.95 points at 14758.24, a 2.34% drop and the index's worst fall so far this year. The Dow closed down 206 points Wednesday.
The selloff follows a press conference on Wednesday at which Fed chairman Ben Bernanke gave his clearest indication yet that he intends to ease off on the so-called quantitative easing (QE) stimulus program.
Stock markets reacted badly to the news even as Bernanke made clear that the US economy is improving, and that he had no immediate plans to change tack. Bernanke said he would only cut back QE if and when US unemployment falls to 7%. It is currently at 7.6%.