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Is the stock market finally pulling itself back?

Stimulus cuts, uncertain earnings cause stocks to drop in 2014 02:09

Wall Street opened Thursday morning with stocks at their lowest point for the year. The Dow Jones Industrial Average lost 190 points Wednesday and closed at 15,739. The markets fell because of weak corporate earnings and the Federal Reserve’s decision to reduce economic stimulus money.

CBS News senior business correspondent Anthony Mason joined the “CBS This Morning” co-hosts to discuss the market’s drop. He said that the market was “processing a number of things.”

“First of all … the pulling back of the stimulus from the Fed, second of all you’ve got a slowdown in China, which is weighing on things here, but really, I mean, the market was up 26 percent last year,” he said. “At some point, everybody's been saying there needs to be a pullback; we may finally be getting it.”

Mason said that the Fed is pulling back now because the “fundamentals of the economy are getting stronger.”

“This is something I’ve been hearing from business leaders now for quite a while. Everybody thinks this year is going to be better,” he said. “Now, the cautionary note here is, of course, they’ve been saying that for the last couple of years.”

He also discussed the impact of the Fed’s decision on China.

"Part of what’s going on here is, with the Fed pulling back, the expectation is that interest rates are going to go up and that investment money is going to move back to the states and that’s going to hit emerging markets,” he said. “But, really, I think what's going on here with the market is just a readjustment and a recalculation in terms of, with the Fed pulling back, what’s that going to mean for the economy, is the U.S. economy going to get weakened?”

Also, Wednesday’s Fed meeting was the last for Chairman Ben Bernanke. Janet Yellen will take over as Fed chair Friday. Mason told the co-hosts that, despite the change, in the “near term, it’s going to be pretty much business as usual.

“The two have been- not necessarily in lockstep but they’ve pretty much been in agreement about the way things should go,” he said. “If anything, Yellen may be a little bit more cautious than Bernanke.”

He also said he thinks Yellen is “the most powerful woman in American history, until we have a female president.”

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