The Joplin Globe, Joplin, MO

Business

June 11, 2013

Wall Street shrugs off a global market rout

NEW YORK — Renewed concerns about central banks easing off their efforts to support the global economy weighed on the U.S. stock market Tuesday. Indexes were slightly lower in afternoon trading.

It started off much worse. The stock market began sliding from the opening bell, trailing markets in Asia and Europe, which were rattled when the Bank of Japan decided not to take any new steps to spur that country’s economic growth.

The news out of Japan added to concerns surrounding global central banks, investors said. U.S. markets have been shaken by speculation that the Federal Reserve will start curtailing its own bond-buying program in the coming months.

“There’s just a lot of uncertainty,” said Dan Greenhaus, chief global strategist at the brokerage BTIG in New York. “People are worried about the Fed. They’re worried about a spike in interest rates. And then Japan says it’s finished for now.”

The Dow Jones industrial average was down 57 points at 15,181 as of 3:15 p.m. Eastern Daylight Time. That’s a decline of 0.4 percent. It was down as much as 152 points in the first hour of trading, then climbed back in the morning.

The Standard & Poor’s 500 index fell nine points to 1,633, a loss of 0.6 percent. Nine of the 10 industry groups in the index fell, led by banks and energy companies.

Sprint Nextel gained 2 percent after Japan’s Softbank raised its offer for the company by $1.5 billion. Softbank’s total bid for the country’s third-largest phone carrier is now valued at $21.6 billion, still short of the $25.5 billion offered by Dish Network. Sprint’s stock rose 16 cents to $7.34.

The S&P 500 index has lost 2 percent since setting a record high on May 21. The next day, minutes from a monthly Fed meeting suggested the central bank could decide to scale back its stimulus as early as June if the economy picks up.  

Overseas, the Bank of Japan voted to stick to its current bond-buying program, disappointing those who had expected new measures to help the world’s third-largest economy. Japan’s Nikkei stock index lost 1.5 percent.

Major stock markets in Europe also fell. Germany’s DAX dropped 1 percent and France’s CAC-40 lost 1.4 percent.

In the market for U.S. government bonds, the yield on the 10-year Treasury note was 2.21 percent, the same as it was late Monday.

In commodities trading, crude oil fell 39 cents to $95.38 a barrel in New York. Gold dropped $9 to $1,377 an ounce.

The Nasdaq composite fell 22 points to 3,451, a 0.6 percent decline.

Among other companies making big moves:

— Lululemon Athletica plunged $13.73, or 16 percent, to $68.57 following news that the yoga-clothing maker’s CEO will step down as soon as the company’s board finds a replacement.

— Dole Foods soared 21 percent after the company’s CEO and his family offered to take the fresh fruit and vegetable company private at $12 per share. That bid values the company at $1.1 billion. The company’s stock gained $2.16 to $12.36

— Corinthian Colleges slumped 32 cents, or 11.5 percent, to $2.47. The company disclosed that it’s under investigation by the Securities and Exchange Commission and has been asked to turn over information on student attendance, recruitment and defaults on federal loans. The Santa Ana, Calif. company runs the Everest, Heald and WyoTech colleges.

 

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