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6C Daily News– Wednesday, September 26, 2012 NEW YORK (AP) — A quiet day on Wall Street turned into the worst sell- off in three months after a Federal Reserve official said he doubted the bank's effort to boost eco- nomic growth would work. Charles Plosser, presi- dent of the Fed's Philadelphia branch, told an audience Tuesday that the Fed's effort to sup- port the economy would likely fall short of its goals. The speech probably startled some investors who had faith in the Fed's latest plan, said Jack Ablin, chief investment officer Harris Private Bank. The plan includes buying $40 billion in mortgage bonds each month until the economy improves. ''So many investors have bought into the illu- sion,'' he said. ''And it was like Plosser pulled up the curtain on the Wizard of Oz.'' Dow drops 100 after Fed official's warning Wall Street nomic growth around the world dampened its earn- ings forecast. Its stock sank $3.86 to $87.01. Stocks enjoyed one of their biggest rallies of the year Sept. 6 after Mario Draghi, the president of the European Central Bank, laid out a plan to buy unlimited amounts of government bonds to lower borrowing costs for Europe's debt-burdened countries. S&P but is not included in the Dow, helping explain why the S&P suffered a greater percentage decline than the Dow's 0.8 per- cent. The closely watched Standard & Poor's/Case Shiller index of national house prices increased 1.2 percent in July compared with the same month in 2011. Prices rose from the previous month in all 20 major cities tracked by the report for the third month in a row. A week later, Fed Chairman Ben Bernanke announced the central bank's open-ended mort- gage bond-buying pro- gram and pledged to hold interest rates at super-low levels into 2015. The Standard & Poor's 500 index lost 15.30 points, its fourth straight decline, to close at 1,441.59. The 1.05 per- cent drop was the worst for the S&P since June 25. trial average lost 101.37 points to close at 13,457.55. Caterpillar tugged the Dow down, losing 4 percent. The world's largest maker of bulldozers and other heavy equipment said late Monday that slower eco- The Dow Jones indus- nearly five-year closing high of 1,465 the next day, Sept. 14, but has drifted lower since and fallen back almost to where it was before Bernanke's announce- ment. The S&P soared to a On Tuesday, three eco- nomic reports gave the stock market a nudge in morning trading. House prices rose in major cities for a third straight month, and a gauge of consumer confidence came in sur- prisingly high. More surprising than those two economic reports was the Richmond Federal Reserve's strong reading on regional man- ufacturing, a recent trou- ble spot, said Phil Orlan- do, chief equity strategist at Federated Investors. ''Look at that. There were three data points on the economy and we crushed them,'' said Phil Orlando, chief equity strategist at Federated Investors. But sagging profits could drag on the stock market in the coming weeks, Orlando said. Caterpillar joined a grow- ing collection of compa- nies that have lowered their earnings forecasts. FedEx, a bellwether of world trade, said Sept. 18 that shipping has sunk to recession-like levels. Railroad giant Norfolk Southern has also warned that falling shipments and sinking coal prices will likely drag down its earn- ings. Wall Street analysts now estimate that corpo- rate profits will be lower this quarter than a year earlier. That would be the first such drop in three years. index dropped 43.05 points to 3,117.73. Google's stock touched an all-time high in early trading, clearing $764, but closed the trading day at $749.16. The Nasdaq composite Apple, the largest pub- lic company in the world, lost $17.25, or 2.5 per- cent, to close at $673.54. It has lost more than $26 in two days. Apple is the biggest component in the manufacturing index, which surveys compa- nies in the central Atlantic region, increased after shrinking for three months as busi- nesses turned more opti- mistic. Companies said they anticipate more orders and shipments even as employment dips. The index turned positive in September after a negative reading in August. Treasury prices rose as traders shifted money into safe assets. The 10-year Treasury yield, the bench- mark for mortgages and other loans, dipped to 1.67 percent from 1.71 percent late Monday. The Conference Board said its gauge of con- sumer confidence shot to a seven-month high of 70.3 in September, up from 61.3 in August and far higher than the 63 ana- lysts were expecting. Peo- ple surveyed said they were more optimistic about the job market. The Federal Reserve's DAILYNEWS RED BLUFF TEHAMACOUNTY redbluffdailynews.com Subscribe Now! To get started, go to: www.redbluffdailynews.com/websubscribe