Market Recap: Fed Worries Bring Down the Market

Markets closed down today:

▼ Dow: -0.49 percent
▼ Nasdaq: -0.20 percent
▼ S&P: -0.40 percent

Precious metals:

▼ Gold: (NYSE:GLD) down -1.87 percent to $1,645.52 an ounce
▼ Silver: (NYSE:SLV) up -1.25 percent to settle at $32.61

Commodities:

▼ Oil: -0.92 percent

Markets closed down today because:

U.S. stocks and Treasury prices dropped Tuesday after Federal Reserve policymakers said they were worried about a slowdown in hiring and appeared to resist buying more bonds to help the economy.

The Fed minutes showed that policymakers fear hiring could slow if economic growth doesn’t improve. The country added an average of 245,000 jobs per month from December through February, the strongest three months since the Great Recession.

Only two of 10 voting committee members on the Fed committee said they would support another round of bond purchases, and only if the economy weakened significantly.

The minutes did not address the logistics of more bond-buying, troubling traders of stocks and bonds who anticipate more action from the Fed, said John Canally, an economist for LPL Financial.

The release of the minutes reduced demand for government bonds, driving prices down and yields up. The yield on the benchmark 10-year Treasury note rose to 2.31 percent from 2.16 percent earlier Tuesday. That was its highest since March 20.

Among the ripples in the financial markets after the Fed’s announcement:

- The sell-off in Treasurys was broad. The price of the 30-year Treasury bond fell $2.53 per $100 invested, pushing its yield up to 3.44 percent from 3.32 percent before the Fed minutes.

- Gold fell $38 an ounce to $1,642 after trading almost unchanged earlier. The Fed minutes suggested inflation is under control, and traders sometimes buy gold as a hedge when they worry about inflation, driving the price up.

- The dollar rose against the euro, also after being virtually unchanged for most of the day. The euro was down 1.1 cents against the dollar to $1.322 in afternoon trading. Speculation that the Fed won’t act typically helps the dollar. When the Fed buys bonds and other debt securities to keep rates low, that limits the returns available to investors who hold the dollar.

Trading volumes have been light for about two weeks in part because there has been relatively little news to move markets. Many companies are quiet ahead of earnings season, which begins in earnest next week.

The government will release its March jobs report on Friday. Economists expect that hiring slowed modestly last month. The report’s impact on the market might be muted because markets will be closed for the beginning of Easter weekend.

The Associated Press contributed to this report.