The Fed Beckons02.29.2012
Wednesday’s trading session was chaotic as Federal Reserve Chairman Ben Bernanke testified on the state of the economy before Congress.
After questions fielded by various politicians, equity markets sunk as Bernanke cautioned investors that the punch bowl of liquidity that the Fed has offered for the past few years won’t continue forever. The news spooked investors who sold off on various comments, dropping the S&P 500 down to 1366. By the close, markets had rebounded but ultimately faltered with the Dow Jones Industrial Average and S&P 500 closing at 12,951 and 1365, respectively.
Precious metals took the largest hit, with gold falling a whopping $80 an ounce after the start of Bernanke’s testimony, ultimately closing at $1708 an ounce. Gold had issues related to testing November highs of $1800 an ounce, which failed, driving the price lower. Multiple sell stops were taken out along the drop. Silver also followed suit, dropping $2.55 to close at $34.60 an ounce.
Some didn’t take kindly to Bernanke’s comments, such as Hedgeye CEO Keith McCullough. “Sad day for the country with the world watching us let The Bernank make things up,” McCullough tweeted to his followers.
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