Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Overnight Markets: US stocks fall as budget deal spurs Fed bets

Overnight Markets: US stocks fall as budget deal spurs Fed bets

Wall Street declined on Wednesday, with the Standard & Poor’s 500 Index registering its biggest back-to-back drop in two months, as traders locked in recent gains after a provisional budget deal out of Washington fuelled speculation the Federal Reserve could trim stimulus next week.

The Dow Jones industrial average fell 130 points or 0.81%, to end at 15,843. The S&P 500 slid 20 points or 1.13%, to close at 1,782. The Nasdaq Composite dropped 57 points or 1.4%, to finish at 4,004.

The bipartisan budget deal reached late on Tuesday would end three years of political confrontations and fiscal instability in Washington that climaxed in October with a partial government shutdown. A vote in the US House of Representatives could come as soon as Thursday.

The deal comes after data last week showed the jobless rate declined to a five-year low and the US economy expanded in the third quarter at a rate faster than initially estimated.

In corporate news, Costco's (COST.O) profit missed Wall Street's estimates because of higher stock-based compensation expenses and spending on technology. Its shares lost 1.2%.

Laboratory Corp (LH.N) shares tumbled 11% after the medical testing company slashed the lower end of its full-year adjusted earnings forecast. The stock of rival Quest Diagnostics (DGX.N) fell 5.8%.

MasterCard (MA.N) gained 3.5% after the company announced a 10-for-1 stock split and a new $3.5 billion stock-buyback programme, and raised its quarterly dividend by 83%.

Shares of its competitor Visa (V.N) added 3.1% to close at a record $205.66. Visa also reached a record intraday high at $207.90.

Mining equipment maker Joy Global Inc (JOY.N) fell 5.5% after the company forecast 2014 earnings below analysts' estimates after reporting a quarterly profit that fell short of expectations.

Cisco Systems Inc. lost 1.6% after losing a European Union court bid to overturn approval of Microsoft Corp.’s 2011 takeover of Skype Technologies SA.

In Asia, stocks fell on Thursday as investors speculate the US budget deal will give the Fed confidence to curb stimulus as soon as next week.

The MSCI Asia Pacific Index slid 0.7% to 139 as of 9:39 a.m. in Hong Kong. Japan’s Topix index fell 0.7% as the yen held near its strongest level this week versus the dollar.

Australia’s S&P/ASX 200 Index lost 0.6%, falling for a sixth day in the longest losing streak in 17 months. South Korea’s Kospi index retreated 0.7% and New Zealand’s NZX 50 Index slid 0.2%.

Hong Kong’s Hang Seng Index slid 0.1% and China’s Shanghai Composite added 0.1%. Taiwan’s Taiex Index and Singapore’s Straits Times Index both declined 0.4%.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Volatility spike: How ETFs can soften the blow

Volatility spike: How ETFs can soften the blow

ETFGI’s Deborah Fuhr discusses the role of ETFs in client portfolios during volatile market conditions

Play Winter market warmers, the post QE world and timing the Fed

Winter market warmers, the post QE world and timing the Fed

This week’s episode of Investment Pulse looks at the winding down of quantitative easing, whether to try and time a US Federal Reserve rate rise and if strong seasonal performers can reverse recent market slumps

Play JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Wealth Manager on Twitter