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June 12, 2013

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US stocks end with a loss

NEW YORK — Renewed concerns that central banks will ease off their support for the global economy hit the U.S. stock market Tuesday.

Indexes began sliding from the opening bell. Before U.S. markets opened, Asia and then Europe had already fallen, rattled by the Bank of Japan’s decision not to take new steps to spur growth in the world’s third-largest economy.

The news out of Japan added to questions surrounding global central banks, investors said. U.S. markets have been shaken by speculation that the Federal Reserve will start curtailing its own bond-buying program in the coming months.

“There’s just a lot of uncertainty,” said Dan Greenhaus, chief global strategist at the brokerage BTIG in New York. “People are worried about the Fed. They’re worried about a spike in interest rates. And then Japan says it’s finished for now.”

The Standard & Poor’s 500 index fell 16.68 points, or 1 percent, to close at 1,626.13. All 10 industry groups in the index dropped, led by banks and energy companies.

Earlier, major stock markets in Europe and Asia slumped. Germany’s DAX dropped 1 percent and France’s CAC-40 lost 1.4 percent. Japan’s Nikkei stock index fell 1.5 percent after the Bank of Japan voted on Tuesday to stick to its current bond-buying program, disappointing those who had expected the bank to widen its effort.

The world’s biggest central banks have bought trillions of dollars worth of bonds in recent years, pressing long-term interest rates down in an attempt to encourage borrowing and spending. In the U.S., the Fed buys $85 billion in bonds each month.

With plenty of signs the U.S. economy is improving, many on Wall Street expect the Fed will start cutting back this summer. That’s one reason traders have been selling bonds, pushing the yield on the 10-year note from a low of 1.63 percent last month to 2.18 percent on Tuesday.

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