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Overnight Markets: US stocks decline on Fed minutes
by Himanshu Singh on Feb 21, 2013 at 04:56
Wall Street declined on Wednesday, with the Standard & Poor’s 500 Index registering its biggest decline since November, as minutes from the Federal Reserve’s last meeting showed a debate over further stimulus action.
The Dow Jones industrial average dropped 108 points, or 0.77%, to 13,928 at the close. The Standard & Poor's 500 Index fell 19 points, or 1.24%, to 1,512. The Nasdaq Composite Index lost 49 points, or 1.53%, to end at 3,164.
Shares declined after the minutes from the Fed’s most recent meeting suggested the central bank may slow or stop buying bonds sooner than expected. Many officials raised concern last month over potential costs of more asset purchases, suggesting that the QE programme may slow before the pickup in hiring it was intended to deliver.
Energy companies' shares suffered the most, hurt by disappointing results in the sector and a 2% drop in crude oil prices. Newfield Exploration plunged 9.3%, while Devon Energy Corp fell 6.6%. Both companies posted fourth-quarter losses, with Devon hurt as it wrote down
Housing shares also fell after weaker-than-expected results at Toll Brothers Inc and a drop in groundbreaking to build new U.S. homes in January. Toll Brothers' stock fell 9.1%.
On the positive side, Boeing was up 0.2% after a source told Reuters that the company had found a way to fix battery problems on its grounded 787 Dreamliner jets.
OfficeMax Inc declined 7%, while Office Depot slid 16.7% as the companies announced a $1.2 billion merger agreement. Rival Staples Inc plunged 7.2%. Caterpillar Inc. slid 2.5% after saying global retail machine sales dropped.
Freeport-McMoRan Copper & Gold Inc. fell 6%, while Cliffs Natural Resources slid 4.9%. Apple also declined after Foxconn halted recruitment until the end of March.
In Asia, shares fell on Thursday in afternoon trade amid concern the US Fed b may scale back economic stimulus and China will step up property curbs.
The MSCI Asia Pacific Index dropped 1.5% to 133 as of 1:24 pm in Tokyo. Japan’s Nikkei 225 Stock Average fell 1.2%. South Korea’s Kospi Index lost 0.6% after yesterday rising the most since September. Australia’s S&P/ASX 200 Index dropped 2.1%, headed for its biggest loss since May.
Hong Kong’s Hang Seng Index declined 1.8%, while China’s Shanghai Composite Index lost 2.7%, poised for the biggest drop since June.
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