followers 0 popularity
following 0
tjdetai is not in any groups


detect metals co.,ltd
detai | tjdetai

U.S. Stocks Drop a Second Day on Korea Clash, European Crisis

Sep 7th 2015 at 8:55 PM


U.S. stocks dropped for a second day after fighting broke out among North and South Korea and concern grew that Europe's debt crisis and China's efforts to tame inflation will slow the global economic rebound.


PulteGroup Inc. and D.R. Horton Inc., the two largest U.S. homebuilders, slumped at least 3.4 percent after a report showed existing home sales trailed estimates. Adobe Systems Inc. slipped 3.4 percent after Morgan Stanley said analysts' estimates for the first half of fiscal 2011 may be too high. Brocade Communications Systems Inc. tumbled 10 percent as the biggest maker of switches for data-storage networks forecast earnings that missed analysts' predictions.


The Standard & Poor's 500 Index slid 1.4 percent to 1,180.73 as of 4 p.m. in New York, and earlier fell 1.8 percent, the most since Aug. 11. The Dow Jones Industrial Average lost 142.21 points, or 1.3 percent to 11,036.37. Stocks also declined as the fallout from a federal probe of Wall Street insider trading continued into a second day.


"It's a fear day," said Don Wordell, a fund manager for Atlanta-based RidgeWorth Capital Management, which oversees about $62 billion. "You have Europe debt worries, tension in Korea, hedge fund investigations, a weak housing report. There's a tremendous amount of bad news to absorb. That's not going to encourage risk appetite."


The S&P 500 has fallen 3.7 percent since reaching a two- year high on Nov. 5 amid concern Europe's debt crisis is intensifying and growing speculation that China will boost interest rates. The decline trimmed the gauge's rally this year to 5.9 percent.


Volatility Soars


The benchmark for U.S. stock options jumped 12 percent to 20.63, the most since Aug 11. The VIX, as the Chicago Board Options Exchange Volatility Index is known, measures the cost of using options to protect against S&P 500 declines. The index is down by more than half from this year's peak of 45.79 in May.


Asian and European stocks slumped as North Korea sent artillery shells into South Korea near the two nations' western border. South Korea returned fire and scrambled fighter jets as President Lee Myung Bak vowed to respond "sternly."


China's biggest banks are close to reaching government-set caps on lending and will stop expanding their loan books as part of a plan to cool inflation and surging property prices, according to four people with knowledge of the matter.


Stocks also fell on concern about Europe's debt woes. Ireland risks a "major bank run" unless European officials act quickly to calm turmoil after the country requested a financial rescue, Pacific Investment Management Co. Co-Chief Investment Officer Mohamed A. El-Erian said today in a radio interview on "Bloomberg Surveillance" with Tom Keene.


‘Bleeding Deposits'


"The numbers so far have shown that the Irish banking system has been bleeding deposits," El-Erian said. "It will seriously undermine the prosperity of this country for a generation."


U.S. equities held declines this morning after the National Association of Realtors's report showed purchases of previously owned homes fell 2.2 percent to a 4.43 million annual rate last month from 4.53 million in September. Economists projected sales would decline to a 4.48 million pace, according to the median forecast in a Bloomberg News survey. The median price slipped 0.9 percent from a year earlier.


The S&P 500 Supercomposite Homebuilding Index slumped 1.9 percent as 11 of its 12 members dropped. PulteGroup slipped 3.5 percent to $6.27, while D.R. Horton lost 3.4 percent to $10.06.


Hedge Fund Probe


The U.S. crackdown on insider trading extended into a second day as former traders of Steven A. Cohen's SAC Capital Advisors LP were implicated in the investigation.


Federal Bureau of Investigation agents yesterday searched the offices of Level Global Investors LP and Diamondback Capital Management LLC. Wellington Management Co., the Boston-based money manager that oversees $598 billion, also got a request for documents from U.S. investigators, according to a person familiar with the firm. Janus Capital Group Inc. said today that it got a request for general information and intends to cooperate with the inquiry.


Equities maintained losses after minutes from the Federal Reserve's latest meeting showed policy makers disagreed over expanding record monetary stimulus through asset purchases, a tactic known as quantitative easing. Fed officials raised their unemployment projections for the next two years while lowering their 2011 growth outlooks.


"If QE is necessary or not, that's something we don't know," said Philip Dow, director of equity strategy at Minneapolis-based RBC Wealth Management, which oversees $164 billion. "It was not that long ago that we were worried about a double dip" recession.


Adobe, Brocade


Adobe dropped 3.4 percent to $28.19. The maker of graphic software faces a slowing pace of corporate upgrades since the introduction of its new Creative Suite 5 software, Morgan Stanley analyst Adam Holt wrote in a note.


Brocade Communications tumbled 10 percent to $5.13 after the company said it forecasts fiscal first-quarter earnings of 9 cents to 10 cents a share, falling short of the 14-cent average analyst estimate.


Airgas Inc. fell the most in the S&P 500, sliding 5.9 percent to $62. The company seeking to fend off a $5.5 billion takeover by Air Products & Chemicals Inc. persuaded a Delaware appeals court to invalidate a ruling moving up the date for its annual meeting.


Energy, Materials


Measures of energy and raw-materials producers declined the most among 10 groups in the S&P 500, following a drop in commodities prices on concern about slower global demand.


Freeport-McMoRan Copper & Gold Inc., the largest publicly traded copper producer, slid 3.2 percent to $98.70. Exxon Mobil Corp., the biggest energy company, lost 1.7 percent to $68.98.


A separate Commerce Department report today showed the U.S. economy grew at a 2.5 percent annual rate in the third quarter, faster than previously calculated. Economists in a Bloomberg survey forecast growth of 2.4 percent.


The S&P 500 tends to rise in the final part of the year, rallying 72 percent of the time, according to data dated back to 1945 compiled by Birinyi Associates Inc. The benchmark index has gained an average 1.9 percent in the period between Thanksgiving to New Year's Eve, while it climbs 3.4 percent on average when evaluating only the positive periods, the data show.


More information can be viewed:aluminum sheets for sale

Please to comment

sign in

Remember Me

New to IM faceplate? join free!

Lost Password? click here