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Overnight Markets: Wall Street tumbles on QE fears
by Himanshu Singh on Aug 16, 2013 at 04:14
Wall Street declined the most since June on Thursday after poor results and outlooks from Dow components Wal-Mart and Cisco and amid concern the Federal Reserve will reduce stimulus.
A report showed the number of people filing for US jobless benefits plunged to six year low last week in another sign that the US is well on the road to recovery, which will encourage the Fed to end QE sooner rather than later.
The Dow Jones industrial average was down 225 points, or 1.47%, at 15,112. The Standard & Poor's 500 Index was down 24 points, or 1.43%, at 1,661. The Nasdaq Composite Index was down 63 points, or 1.72%, at 3,606.
Consumer and technology stocks were among the biggest decliners. Wal-Mart Stores' (WMT.N) shares fell 2.6% on a surprise decline in quarterly same-store sales and Cisco Systems (CSCO.O) shares plunged 7.1% one day after the network equipment maker announced it was cutting 4,000 jobs.
Economic data showed consumer prices increased broadly in July and new claims for jobless benefits last week declined near a six-year low, factors which could draw the Fed closer towards scaling down its monthly bond-buying programme.
Other decliners in the technology sector included Ciena Corp (CIEN.O), down 5.7%, and F5 Network, which slipped 3.5%. Hewlett-Packard Co. retreated 4.5%.
Semiconductor companies also tumbled with Micron Technology Inc. dropping 4.7%. Advanced Micro Devices Inc. slid 3.4%.
On the positive side, Kohl's (KSS.N), the retailer which reported a rise in quarterly same-store sales, sent its stock up 5.3%.
J.C. Penney (JCP.N) rose 5.5% after Billionaire George Soros added another 2 million shares to his stake in the struggling retailer.
Gannett Co. tumbled 5.1% after Warren Buffett’s Berkshire Hathaway Inc. exited its stake in the newspaper publisher.
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