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Overnight Markets: U.S. stocks declines as budget talks falter
Health care and consumer staples led the declines amid deteriorating federal budget discussions.
Wall Street declined on Wednesday as deteriorating federal budget discussions stoked fears that automatic tax increases and spending cuts will be triggered.
The Dow Jones industrial average dropped 99 points, or 0.74%, to 13,252. The S&P 500 lost 11 points, or 0.76%, to 1,436. The Nasdaq Composite fell 10 points, or 0.33%, to 3,044.
House Speaker John Boehner, the top Republican in Congress, has said that his chamber will pass a proposal that Obama had already threatened to veto as it spares many wealthy Americans from tax increases needed to balance the budget.
Health care and consumer staples led the declines. Herbalife Ltd tumbled 12.1% after William Ackman, one of the world's biggest hedge fund managers, said he is shorting the stock of the weight management products company.
Economic data showed, housing starts in the U.S. fell 3% to a 861,000 annual rate from a revised 888,000 annual pace in October, the Commerce Department reported.
Alcoa Inc. fell 3% as Moody’s Investors Service placed the aluminum producer’s credit rating under review for a downgrade.
General Electric Co. slipped 3.1%, while AT&T Inc., the largest U.S. telephone company, decreased 1.3%.
In contrast, General Motors surged 6.6% after the automaker said it will buy back 200 million of its shares from the U.S. Treasury.
Oracle jumped 3.7% after the company reported earnings that beat expectations on strong software sales growth.
Knight Capital Group Inc climbed 5.4% after it agreed to be bought by Getco Holdings in a deal valued at $1.4 billion.
Shares of Chinese display advertising provider Focus Media Holding Ltd jumped 6.7% after it agreed to be bought by a consortium of private equity funds led by the Carlyle Group for about $3.6 billion.
In Asia, shares fall on Thursday in morning trade as U.S. budget negotiations faltered and a strengthening yen weighed on Japanese shares.The MSCI Asia Pacific Index slipped 0.1% to 129 at 11:17 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average declined 0.9% with the yen rising against all of its 16 major counterparts. South Korea’s Kospi Index rose 0.3%. Australia’s S&P/ASX 200 gained 0.4%. Hong Kong’s Hang Seng Index slid 0.3% and China’s Shanghai Composite Index dropped 0.2%.
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by Michelle McGagh on May 25, 2016 at 11:21