The Dow was the only major index to eek out gains over the past five-day trading period. Monday was a market holiday, and investors seemed to get to work on Tuesday well rested and optimistic. The Dow gained 0.39 percent, the S&P 500 gained 0.73 percent, and the NASDAQ climbed 0.68 percent. However, the markets experienced pretty much nothing but selling pressure of the next two days.
One of the major catalysts was the release of the minutes from the January Federal Reserve meeting. Like the minutes from the December meeting, the report showed that some Fed officials were expressing concern over the longevity of quantitative easing. The idea that the Fed could end its asset-purchase program early — sometime in 2013, as opposed to sometime in 2014, when the labor markets will hopefully be healthier — suddenly curbed a investor appetite for risk.
In reality, the Fed is unlikely to stop asset purchases anytime soon. For better or worse, the markets have become addicted to easy-money policy. What’s more, Fed chairman Ben Bernanke and most other top and voting members of the board still strongly favor the strategy.
Several components also experienced price action this week that helped push or pull the index in either direction…