Operation Twist Angers Wall Street

Sep 22, 2011, 08:56 by R.E. Christian

A punishing sell off went to a second day Thursday on Wall Street, as investors rejected a U.S. Federal Reserve stimulus measure.

The Fed's announcement that it would begin an operation twist, exchanging $400 billion in short-term securities for an equal amount of long-term bonds, sent shivers through markets Wednesday afternoon. The Dow Jones industrial average lost 240 points in between the afternoon announcement and the close of trading.

As markets opened in Asia Thursday, the hemorrhaging continued. Markets gave up 4 percent in Hong Kong and India and 2.7 percent in China. In Australia, the S&P/ASX 200 index dropped 2.6 percent.

In midday trading in Europe, stocks were off 4 percent in Britain, Italy, France, Germany, Sweden and Belgium.

In midmorning trading on Wall Street, the DJIA shed 316.43 points or 2.84 percent to 10,808.40. The Standard & Poor's 500 lost 31.08 points or 2.66 percent to 1,135.68. The Nasdaq composite index lost 68.19 points or 2.69 percent to 2,470.00.

The benchmark 10-year treasury rose 25/32 to yield 1.76 percent.

The euro fell to $1.3449 from Wednesday's $1.3572. Against the yen, the dollar fell to 76.1795 yen from Wednesday's 76.44 yen.

In Tokyo, the Nikkei 225 index shed 2.07 percent, 180.90, to 8,560.26.

Overnight, the price of November contract West Texas Intermediate crude oil priced in New York dropped 4 percent to $81.13 per barrel. The price of gold plummeted, listed as dropping $82.70 to $1,725.40 on the Comex division of the New York Mercantile Exchange.

Source: UPI