US markets performed poorly today after two session of sharp gains. The market for stock futures went down on uncertainty over Fed’s next steps in combating a weak economy. The Federal Reserves Chairman Ben Bernanke is due to give a speech on Friday in Wyoming.
Bank of America Corp., the biggest U.S. bank, fell 2.2 percent in German markets. Citigroup Inc. went down by 0.7 percent and Goldman Sachs Group Inc. declined by 0.8 percent.
Standard & Poor’s 500 Index futures for September lost 0.7 percent to 1,150.2 morning trade in London. The Dow Jones Industrial Average futures which expire the same month went down 78 points, or 0.7 percent, to 11,063.
The markets are expectant that he would announce some new stimulus measures. There is some expectation on a QE3. That is, Fed would print more money to pump into the market. These expectations are likely to be disappointed, according to analysts, who say that it is more likely that the Chairman would use the opportunity to unveil Fed’s economic outlook.
If the markets were to feel that the Fed is not doing enough to help an ailing economy, there could be a sell off, and a further slide in value, analysts warned.
The Fed had earlier announced it would keep interest rates near zero for the next two years, in an effort to prop up the market.
The S&P had climbed 3.4% in Tuesday trading on speculation of a further stimulus measure.