Stocks opened sharply lower Wednesday and sank even further, after a gloomier assessment of the US economy from the Federal Reserve. Art Cashin, director of floor operations at UBS Financial Services, discussed his insights.
“Initially, [investors] felt somewhat calm about it because [the Fed] didn’t mention deflation or any extraordinary new measures,” Cashin told CNBC.
“But overnight, people thought and said '[The Fed] didn’t have much latitude' and they really were worried—if you drill down to what the Fed said and the position they’re in.”
On Tuesday, the Federal Reserve took fresh steps to lower borrowing costs amid a softening economic recovery, announcing it would use proceeds from its maturing mortgage bonds to buy more government debt.
Cashin added that the S&P 500 was approaching “critical support areas” near 1,105-1,108.
“If we break through that and if we close below it, it may change the game across the board,” he said. (Check S&P here after market close.)
Scorecard—What He Said:
- Cashin's Previous Appearance on CNBC (Aug. 9, 2010)
Strategists React to Fed:
- Fed Can't Do Much More to Boost Economy: El-Erian
- Cramer: Fed Said Good Things—Buy
- Fed to Market: Long-Term Rates Can Go Even Lower
CNBC Data Pages:
Wednesday's Top Dow Losers (as of this writing):
See Cisco Earnings Preview
No immediate information was available for Cashin or his firm.