US stocks slip amid Fed stimulus taper talk
US stocks fell in early trade Tuesday after a top Federal Reserve official said that its monetary stimulus program cannot continue forever, adding to expectations about the looming scaleback.
After 45 minutes of trade, the Dow Jones Industrial Average was down 23.41 points (0.15 percent) at 15,759.69, pulling back from Monday's record high.
The broad-based S&P 500 Index fell 4.44 (0.25 percent) to 1,767.45, while the tech-rich Nasdaq Composite dropped 11.88 (0.30 percent) to 3,907.91.
"There won't be any hard data for the US that is released today, yet participants have taken note of some overnight remarks from Dallas Fed President (Richard) Fisher who said QE can't go on forever," Patrick O'Hare of Briefing.com said.
"Mr. Fisher's hawkish leaning is well known, but it is beginning to resonate more since participants are cognizant that he will be a voting FOMC member in 2014."
Fisher, in an interview with CNBC, said the Fed's balance sheet has become "bloated" and warned that "at some point, we will have to taper back on the pace of purchases. But that doesn't mean we'll stop. We'll have less accommodation as opposed to the current $85 billion a month."
The mild stocks sell-off followed Monday's modest gains that pushed the Dow to a record close and the S&P just a whisker shy of a record amid thin trading volume due to the Veterans Day holiday.
With the Dow and the S&P highs, "we expect to see some modest price consolidation in the stock market over the next few days," said Fred Dickson of DA Davidson & Co.
In corporate news, News Corp dropped 2.8 percent on the Nasdaq. The publishing and newspaper segment of the recently split media empire of Rupert Murdoch announced a modest profit but falling revenue in its first post-breakup results, and cited "headwinds in Australia."
Dish Network rose 3.0 percent after swinging into a quarterly profit of $315 million from a $158 million loss a year ago.
Homebuilder giant DR Horton shot up 3.5 percent after posting a 39 percent rise in net income for its fiscal fourth quarter.
Home-improvement retailer Home Depot led Dow gainers, up 1.3 percent.
The bond market, which was closed Monday for the holiday, retreated. The yield on the 10-year Treasury rose to 2.76 percent from 2.75 percent Friday, while the 30-year yield advanced to 3.86 percent from 3.84 percent. Bond prices and yields move inversely.