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Stocks Drop as Fed Keeps Option for March Rate Increase


wsj articleThe following is an excerpt from SAUMYA VAISHAMPAYAN | January 27, 2016 | WSJ.com |

U.S. stocks declined Wednesday after the Federal Reserve kept a March increase in interest rates on the table, unnerving investors after weeks of sharp swings in global markets.

The Dow Jones Industrial Average fell 222.77 points, or 1.4%, to 15944.46.

The Fed said in its policy statement it is “closely monitoring” developments in global economies and markets, but stopped short of saying such developments could restrain economic activity and push down inflation.

Renewed fears about the economic slowdown in China and a drop in oil prices have knocked stocks around the world lower this year. The Dow industrials have tumbled 8.5% so far in 2016. The Stoxx Europe 600 has lost 7% and the Shanghai Composite Index has slid 23%.

“The Fed basically said that we are paying attention to markets and global developments but we stick to our game plan’’ of interest-rate increases, said Gene Tannuzzo, senior fixed income portfolio manager at Columbia Threadneedle Investments, which had $471 billion assets under management at the end of September. “The equity market wanted more from the Fed,” he said.

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