Stocks slid after Janet Yellen had her first press conference after the Federal Reserve announced its latest policies on interest rates and its quantitative easing plan. The Federal Reserve today said it would leave interest rates unchanged, and it announced it would continue to wind down its monthly bond-buying program by $10 billion a month to $55 billion from its current level of $65 billion dollars. In her first news conference as Fed Chair, Yellen suggested that the time between the end of tapering and first rate hike could be as little as six months. Stocks pushed drastically lower after the comment, before recovering slightly at the end of the day. The Dow Industrials (^DJI) ended the day down 0.7%, and the S&P 500 (^GSPC) lost 0.6%.
In corporate news, Toyota (TM) agreed to a $1.2 billion settlement with the United States related to a criminal investigation into the company’s handling of unintended accelerations in Lexus and Toyota vehicles in 2009 and 2010. The Justice Department said Toyota will admit it concealed safety issues from customers by making misleading statements. Attorney General Eric Holder said Toyota also made misleading statements to members of Congress.
KB Home (KBH) swung to a profit in its latest quarterly report on higher average selling prices for its homes. This is the first time since 2007 that the company reported a net profit in its first quarter. The homebuilder said selling prices on its homes were up 12%, leading to better-than-expected earnings per share, which came in $0.02 ahead of analysts’ estimates. Other homebuilders also rose on the news.
Another homebuilder, Lennar (LEN) is scheduled to report its quarterly results before the opening bell tomorrow. Wall Street analysts expect earnings and revenue to increase over last year.