Published: Wednesday, 22 Jun 2011 | 7:42 PM ET
CNBC Executive News Editor
Weekly jobless claims could help drive Thursday's markets, which are still likely to be digesting what it means for the Fed to be on hold.
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The stock market Wednesday slumped into the close after the Fed made it clear it has no plans for new easing as it winds down its quantitative easing program (QE2). The Fed also cut its growth forecast to 2.8 percent for 2011 and admitted the economy may be troubled by something other than just temporary factors, like Japanese supply chain disruptions.
Treasurys, at the same time, firmed, even though the Fed's statement and Fed Chairman Ben Bernanke's comments were not surprising.
The Dow lost 80 to 12,109, and the S&P 500 slid 8 to 1287. The 10-year was yielding 2.974 percent in the late afternoon.
"The Treasury market was never looking for anything more on QE.... Without the hint of pending additional policy, the equity market came off and we caught a little more of a bid after being lower," said Ian Lyngen, senior Treasury strategist at CRT Capital.
LPL Financial chief investment officer Burt White said Bernanke and the Fed did just what was expected. "He definitely thinks the second half is going to be marked with better growth and the soft spot we're living through here is transitory. We agree with that," said White.
Bernanke said the Fed does not have a "precise read on why this slower pace of growth is persisting." On policy, he made it clear more easing is unlikely because there are reduced deflation risks, compared to last summer when QE2 was first discussed.
QE2 is widely credited with pumping up risk assets, like stocks and commodities. Some analysts believe recent corrections in stocks and commodities are in part due to the end of QE2, which involved the Fed's purchase of $600 billion in Treasury securities.
What to Watch
Thursday's claims data has become increasingly important with every week that the number stays elevated above 400,000. Expectations are for 415,000 weekly jobless claims, about the same as last week.
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