The Dow Jones Industrial Average fell 413 points, a decrease of 3.7 percent, following morning trading Wednesday. This decline reversed any gains that were made after the late rally that occurred on Tuesday, The Associated Press reported.
A rise in the value of gold had led investors to push their money into the safe-haven markets, as the lack of confidence in the Federal Reserve coupled with the recent downgrade by Standard & Poor’s brought the U.S. markets down, according to the news source.
Financial stocks also retreated due to the confusion in Washington, as organizations like the Bank of New York Mellon Corp. were forced to cut jobs to lower costs due to the developments. These changes occurred following the dim outlook that was given by the central bank of the U.S. late in the day on Tuesday, reported the AP.
The Federal Reserve had acknowledged that the economy grew at its slowest pace in the first half of the year, the worst fiscal results for the country since the 2008 recession ended in June 2009, MSNBC reported.