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Overnight Markets: Wall Street decline on stimulus cut prediction
by Himanshu Singh on Aug 15, 2013 at 04:37
Wall Street declined on Wednesday after economists predicted the Federal Reserve will scale down stimulus in September as European data added to signs that the global economy is strengthening.
The Dow Jones industrial average ended down 113 points, or 0.73%, at 15,338. The Standard & Poor's 500 Index was down nine points, or 0.52%, at 1,685. The Nasdaq Composite Index fell 15 points, or 0.41%, at 3,669.
According to a surveyed conducted by Bloomberg, a majority of economists predicted that the Fed will probably reduce its $85 billion in monthly bond purchases at its meeting on 17-18 September.
A report showed the euro area’s economy emerged from a record-long recession in the second quarter, led by Germany and France. Gross domestic product expanded 0.3% after a 0.3% contraction in the first quarter, the European Union’s statistics office said.
Wednesday's decline accelerated in the final hour of trading after a top Fed official said the US central bank should have more evidence about the economy and inflation before it can make a decision.
Retail stocks were among the day's top decliners after Macy’s Inc. fell 4.5% as the department-store chain cut its profit forecast after weaker-than-estimated sales. But shares of retailer J.C. Penney Co Inc (JCP.N) jumped 3.4% late in the session on high volume.
Homebuilders and utility stocks slumped amid rising bond yields. Home Depot Inc. slid 2.5%, PulteGroup Inc. slid 1.7% and D.R. Horton Inc. fell 2.4%.
Apple Inc. (AAPL) rose 1.8%, extending a rally after billionaire investor Carl Icahn said he’s a shareholder. Cisco Systems Inc. tumbled 9.4% after the close of regular trading as it plans to cut 4,000 jobs. Hewlett-Packard (HPQ.N) fell 1.3% and Ciena (CIEN.O) lost 2.1%.
Boeing Co. lost 2% after the company’s 787 Dreamliner suffered a fresh setback after ANA Holdings Inc., the model’s biggest operator, said it discovered wiring defects in the fire-suppression system on three aircraft. US Airways Group Inc. slumped 1.2%.
Elsewhere, the Newmont Mining Corp. rallied 6.2% for the biggest gain in the S&P 500. Cliffs Natural Resources Inc. increased 2.6%. Freeport-McMoRan Copper & Gold Inc. jumped 1.4% after gold prices climbed 0.6% while copper added 0.8%.
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