* Fed set for $10 billion taper; announcement 2:00 p.m. EST
* South Africa raises rates for first time in 6 years
* Boeing, Yahoo fall after results
* Indexes off: Dow 0.9 pct; S&P 0.8 pct; Nasdaq 0.8 pct
By Angela Moon
NEW YORK, Jan 29 U.S. stocks fell on Wednesday,
along with markets around the world, on concerns that bold
efforts by Turkey and South Africa to stabilize their currencies
may not be enough to staunch a cycle of selling in emerging
The benchmark S&P 500 has lost ground during four of the
past five sessions, amid fears over slowing growth in China and
large capital outflows from developing markets as investors
sought safe-haven assets.
South Africa's central bank raised interest rates for the
first time in six years. This followed a dramatic rate hike by
Turkey's central bank, designed to defend its crumbling
But the euphoria that followed Turkey's move faded, with
European indexes falling into negative territory and Wall Street
slipping in morning trading.
"Our markets are so linked together that if something pulls
a trigger, it's like a domino effect. We are not exactly sure
how one would impact (the decision of) the other, but things
happen fast and investors get quickly nervous," said Joe
Saluzzi, co-head of equity trading at Themis Trading in New
Investors were cautious ahead of the U.S. Federal Reserve's
impending decision on its monthly bond-buying program, with an
announcement due at 2:00 p.m. EST (1900 GMT).
While the expectation is for the central bank to cut its
bond purchases to a monthly $65 billion, market participants
were waiting to see if the Fed would also address the subject of
the recent rout in emerging market currencies.
The Dow Jones industrial average fell 147.38 points,
or 0.93 percent, to 15,781.18, the S&P 500 lost 14.6
points, or 0.81 percent, to 1,777.9 and the Nasdaq Composite
dropped 34.185 points, or 0.83 percent, to 4,063.777.
Boeing Inc shares fell 5 percent to $130.27, even as
it reported a 26-jump in quarterly profit, lifted by a rise in
commercial aircraft deliveries.
Dow Chemical Co shares rose 5.8 percent to $45.56
after raising its dividend 15 percent and expanding its share
buyback program to $4.5 billion from $1.5 billion. The company's
quarterly profit was well ahead of expectations.
Yahoo Inc shares plunged 6.5 percent to $35.70 a
day after announcing a decline in online ad prices which hurt
its revenue for a fourth consecutive quarter. Alibaba, the
Chinese e-commerce giant in which it owns a big stake, saw
revenue growth decelerate.
Wall Street's slide was closely linked to the drop in
emerging market currencies. The South African rand sank
over 2 percent to 11.24 per dollar and the Turkish lira,
which initially rallied more than 3 percent, gave up gains and
traded about 1 percent weaker against the greenback.
"I believe that the selloff in emerging market currencies is
being exacerbated today by the seeming inability of central
banks to halt the decline of their currencies, despite the
draconian hikes in overnight interest rates and the massive
currency interventions in the last few weeks," Robbert van
Batenburg, director of market strategy at Newedge, wrote in a
note to clients.