Wall Street Slumps After Fed Talk Spooks Traders

By MarketsFOXBusiness

FOX Business: Capitalism Lives Here

U.S. equity markets fell sharply into the red Tuesday after speeches from two Federal Reserve officials worried traders in light volume action.

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Today's Markets

The Dow Jones Industrial Average fell 138 points, or 0.83%, to 16374, the S&P 500 dipped 12.3 points, or 0.65%, to 1873 and the Nasdaq Composite slipped 28.9 points, or 0.7%, to 4097.

The markets spent much of Monday lazily floating about the unchanged line. The business news calendar is similarly slow on Tuesday, which is amplified by light volume ahead of the Memorial Day holiday in the U.S.

Home Depot (NYSE:HD) revealed narrowly better-than-expected quarterly profits, but weak sales results drove sales of the world's biggest home improvement retailer into the red. Urban Outfitters (NASDAQ:URBN) revealed mixed results as well, pushing its shares lower.

Credit Suisse (NYSE:CS) pleaded guilty to criminal charges it helped Americans evade taxes. The big Swiss bank will pay $2.6 billion to settle the suit, but it doesn't expect the pact to materially affect its operations.

On the economic front, Philadelphia Federal Reserve chief Charles Plosser said he isn't too concerned about recent weakness in the housing market. At the same time, New York Fed President Bill Dudley said the central bank will pay close attention to Wall Street's response as it eventually hikes interest rates.

"The Fed has done a good job handling expectations, but the fact is the Fed is changing their policy … every time they shake that finger at us, the market responds negatively," Teddy Weisberg, a veteran NYSE floor traders told FOX Business, calling the central bank the "800 pound gorilla in the room."

Elsewhere, U.S. crude oil futures rose 3 cents, or 0.03%, to $102.64 a barrel. Wholesale New York Harbor gasoline dipped 0.18% to $2.959 a gallon. Gold slumped $2.80, or 0.21%, to $1,291 a troy ounce.

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