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March 4, 2013

Stocks open lower on Wall Street; Hess advances

From The Associated Press

NEW YORK — Stocks opened lower on Wall Street after the Chinese government announced new steps to cool the booming housing market in the world’s second-largest economy.

The Dow Jones industrial average fell 49 points, or 0.3 percent, to 14,041 as of 10:18 a.m. EST. The Standard & Poor’s 500 fell two points, or 0.1 percent, to 1,516. The Nasdaq composite dropped six points, or 0.2 percent, to 3,163.

Chinese markets were dragged down by housing stocks, which fell sharply after China’s Cabinet ordered new measures to cool surging home prices. The government said it will raise required minimum down payments in areas where prices are deemed to be rising too fast and crack down on efforts to evade limits on how many properties each buyer can acquire.

U.S. stocks are still close to record levels. The Dow came within 15 points of its record close of 14,164 on Thursday before sliding back and ending the day lower.

The stock market has rallied this year on optimism that the U.S. housing market is maintaining its recovery and signs that companies are slowly starting to increase hiring. Strong company earnings and continuing stimulus from the Federal Reserve have also boosted stock prices.

Janet Yellen, vice chair of the Federal Reserve, said Monday that she does not see any risks at the moment from the U.S. central bank’s low-interest rate policies that would prompt her to urge that the policies be curtailed. The Fed is buying $85 billion per month in Treasury bonds and mortgage-backed securities to push long-term interest rates lower.

Hess gained $2.96 to $69.41 after the company said it would get out of the retail business as well as energy trading and marketing to focus on exploration and production. Hotel and gaming company Las Vegas Sands fell 95 cents to $50.36 after disclosing Friday that the Securities and Exchange Commission asked for records two years ago relating to compliance with the Foreign Corrupt Practices Act.

U.S. economic growth may be crimped this year by automatic government spending cuts of $85 billion, which took effect Friday after President Barack Obama and Congress failed to reach a budget deal. Both Republicans and Democrats pledged to retroactively undo the cuts, but gave no indication of how that process would take shape.

The yield on the 10-year Treasury note, which moves inversely to its price, rose 2 basis points to 1.86 percent. European markets were mixed. Crude oil edged down 36 cents to $90.32 and the dollar was little changed against the euro.

 

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