The Joplin Globe, Joplin, MO

Business

June 20, 2013

Stocks extend slide after Fed comments

NEW YORK — Stocks extended their slide after the Federal Reserve said it could start scaling back its economic stimulus program later this year and end it by the middle of next year.

Comments from Fed Chairman Ben Bernanke in a press conference prompted stock and bond markets to slump Wednesday, and the wave of selling continued in global markets Thursday. Gold led a plunge in commodity prices and the dollar rose against other currencies.

The Dow Jones industrial average was down 141 points, or 0.9 percent, to 14,971 after the first half-hour of trading. The Standard & Poor’s 500 index dropped 14 points, or 0.9 percent, to 1,614. The Nasdaq composite fell 31 points, or 0.9 percent, to 3,412.

The Federal Reserve is buying $85 billion worth of bonds every month to hold down interest rates and encourage borrowing. The stimulus has been a major support for the economy and helped drive a rally in stocks that pushed the Dow and the S&P 500 to record levels this year.

The yield on the 10-year Treasury note rose to 2.40 percent, the highest since October 2011, from 2.35 percent Wednesday. The yield, which rises as the price of the note falls, surged 0.16 percentage point yesterday after the Fed’s comments. It’s up sharply since May 3, when it hit a low of for the year of 1.63 percent.

Government bond yields are used as benchmarks for mortgage rates. The sharp increase in yields prompted investors to sell the stocks of homebuilders, whose business would be hurt if the pace of home buying slows down. PulteGroup fell the most of any stock in the S&P 500 index, giving up $1.49, or 7 percent, to $19.30. D.R. Horton fell $1.11, or 4.7 percent, to $22.29.

Global markets also fell. Japan’s Nikkei index lost 1.7 percent. In Europe, the FTSE 100 index of leading British shares was down 2.2 percent while Germany’s DAX fell 2.5 percent.

In currency trading, the dollar rose against the euro and the Japanese yen.

In commodities trading, Gold plunged $72, or 5 percent, to $1,301 an ounce. The precious metal has slumped 23 percent this year as its attraction as an alternative investment has faded as the dollar and bond yields have risen.

The price of oil fell $2.21, or 2.2 percent, to $96.27 a barrel.

Among other stocks making big moves:

— Jabil Circuit fell 79 cents, or 3.7 percent, to $19.09, after the electronics manufacturer said its net income fell by half in the fiscal third quarter due to restructuring costs. Jabil’s profit forecast for the current quarter also disappointed investors.

— GameStop, a video game store chain that sells new and used games, rose $1.53, or 3.8 percent, to $40.03 after Microsoft backpedaled and said that there will be no limitations on sharing games on its upcoming Xbox One gaming console.

 

1
Text Only
Business
  • Business US stocks edge lower after a six-day rise

    Stocks edged mostly lower Wednesday, breaking a six-day winning streak, as investors were disappointed by the latest round of earnings from U.S. companies.

    April 23, 2014 1 Photo

  • Sales of new US homes plunge 14.5 percent in March

    The number of Americans buying new homes plummeted in March to the slowest pace in eight months, a sign that real estate’s spring buying season is off to a weak start.

    April 23, 2014

  • 3M plant expansion to create 22 jobs

    An $18.7 million expansion at the 3M Co. manufacturing plant in Nevada will create 22 new jobs, a company official said Wednesday. “We started 43 years ago as a small manufacturer,” said Todd Cantrell, plant manager, in a meeting with employees. “We are now the largest 3M plant in the state of Missouri and one of the largest of all 3M plants.”

    April 23, 2014

  • First lady announces one-stop job site for vets

    First lady Michelle Obama has announced a new online effort to link soldiers leaving the military with jobs that match their skill sets.

    April 23, 2014

  • Advocates vow to revive Navajo junk-food tax

    Facing a high prevalence of diabetes, many American Indian tribes are returning to their roots with community and home gardens, cooking classes that incorporate traditional foods, and running programs to encourage healthy lifestyles.

    April 23, 2014

  • Feds seek $211K in fines from Minn. company

    Federal safety regulators are proposing $211,000 in fines for a Minnesota agriculture company that authorities say repeatedly failed to make sure workers weren’t exposed grain dust hazards in Montana.

    April 23, 2014

  • Business US stocks edge lower after a six-day rally

    The stock market slipped Wednesday after rallying for six straight days as investors worked through another round of quarterly earnings reports from U.S. companies.

    April 23, 2014 1 Photo

  • GM, lawyers fight over bankruptcy protections

    General Motors Co. and a battalion of trial lawyers are preparing for an epic court fight over whether GM is liable for the sins of its corporate past.

    April 22, 2014

  • Comcast 1Q earns surge on upbeat NBC results

    Comcast Corp. said Tuesday that its first-quarter net income rose by 30 percent as ad revenue surged at broadcast network NBC, helped by the Winter Olympics in Sochi and Jimmy Fallon’s elevation as host of “The Tonight Show.”

    April 22, 2014

  • Valeant, Ackman make $45.6B Allergan bid

    Valeant Pharmaceuticals and activist investor Bill Ackman have unveiled details of their offer to buy Botox maker Allergan, proposing a cash-and-stock deal that could be worth about $45.6 billion.

    April 22, 2014

Poll

A Missouri Senate committee has adopted a state budget provision that would prevent public colleges and universities from offering in-state tuition rates to students living in the country illegally. Do you agree with this?

Yes.
No.
     View Results
Facebook
Twitter Updates
Follow us on twitter
NDN Video
SKorea Ferry Toll Hits 156, Search Gets Tougher Video Shows Possible Syrian Gas Attack Cubs Superfans Celebrate Wrigley's 100th Raw: Cattle Truck Overturns in Texas Admirers Flock to Dole During Kansas Homecoming Raw: Erupting Volcanoes in Guatemala and Peru Alibaba IPO Could Be Largest Ever for Tech Firm FBI Joining Probe of Suburban NY 'Swatting' Call U.S. Paratroopers in Poland, Amid Ukraine Crisis US Reviews Clemency for Certain Inmates Raw: Violence Erupts in Rio Near Olympic Venue Raw: Deadly Bombing in Egypt Raw: What's Inside a Commercial Jet Wheel Well Raw: Obama Arrives in Japan for State Visit Raw: Anti-Obama Activists Fight Manila Police Motels Near Disney Fighting Homeless Problem Michigan Man Sees Thanks to 'bionic Eye' S.C. Man Apologizes for Naked Walk in Wal-Mart Chief Mate: Crew Told to Escape After Passengers