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Overnight Markets: US stocks fall as budget deal spurs Fed bets
by Himanshu Singh on Dec 12, 2013 at 03:42
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.
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