Tags: Dow | 15000 | Stocks | Fall

Dow Breaks Below 15,000 as Stocks Fall for 3rd Day

Wednesday, 12 Jun 2013 04:52 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Video-game shops, restaurants and retailers led the stock market lower Wednesday.

Without any good news to drive the market up, investors grappled with the question hanging over financial markets: When will the Federal Reserve and other central banks pull back their economic stimulus programs?

Markets have turned turbulent in recent weeks as traders start preparing for a time when the Fed and central banks in Europe and Japan aren't pumping as much money into the financial system.

"There's nothing concrete out there to turn us around today," Russell Croft, co-portfolio manager at the Croft Value Fund in Baltimore. "So naturally enough, people are back to thinking about the Fed."

The Dow Jones Industrial Average fell 126.79 points, or 0.8 percent, to close at 14,995.23. The Dow had its first three-day stretch of losses this year and is down 1.7 percent for the week.

A rout in global markets helped pull the Dow down 116 points Tuesday. The selling started after the Bank of Japan decided not to make any new attempt to spur growth in the world's third-largest economy.

In other trading Wednesday, the Standard & Poor's 500 index fell 13.61 points, or 0.8 percent, to 1,612.52. All 10 industry groups in the index dropped, led by consumer-discretionary and utility companies.

Two of the top-performing stocks in the S&P 500 this year, Netflix and BestBuy, led consumer-discretionary companies down. Netflix lost $6.82, or 3 percent, to $207.64. BestBuy dropped $1.01, or 4 percent, to $26.88. GameStop fell $1.13, or 3 percent, to $36.69.

The S&P 500, the stock-market benchmark for most investment funds, has lost 3.4 percent since reaching a record high on May 21. The next day, Fed chairman Ben Bernanke said the central bank could decide to scale down its bond-buying program in the coming months if the economy looks strong enough.

Since then, the discussion among investors has centered on what will happen when the Fed shifts course. "'Tapering' is definitely the word of the month," Croft said.

Many on Wall Street think the Fed could signal that it's ready to start cutting back on its $85 billion in bond purchases at the end of its two-day meeting next Wednesday. That's a key reason bond traders have been selling Treasurys, sending the 10-year yield from a low of 1.63 percent last month to as high as 2.29 percent this week.

Long-term borrowing rates are still near historic lows, but their jump over the past month has grabbed investors' attention, said Mark Travis, president and CEO of Intrepid Capital Management. "I think people are starting to pause," he said. "If rates continue to drift up, it's probably going to be a headwind for the market."

Despite the losses, there were a few bright spots. Cooper Tire & Rubber jumped 41 percent after Apollo Tyres, an Indian company, announced plans to buy the tire maker for $2.5 billion. The combined company would be one of the world's largest tire makers, Apollo said, with combined 2012 sales of $6.6 billion. Cooper Tire gained $10.10 to $34.66.

Gigamon soared 50 percent on its first day of trading as a public company. The Milpitas, Calif.-based company, which makes equipment for computer-network traffic, raised $128 million in its initial public offering Tuesday. Its stock surged $9.47 to $28.47.

The Nasdaq composite sank 36.52 points, or 1 percent, to 3,400.43.

In the market for U.S. government bonds, the yield on the 10-year Treasury note edged up to 2.23 percent from 2.18 percent late Tuesday.

In commodities trading, crude oil rose 50 cents to $95.88 a barrel in New York. Gold rose $15 to $1,392 an ounce.

Among other stocks making moves:

— First Solar slumped 11 percent, the biggest drop in the S&P 500, following news late Tuesday that the company plans raise money through the sale of 8.5 million shares of stock. First Solar had 87.8 million publicly traded shares as of May 3, and its stock has more than quadrupled over the last year. First Solar lost $4.68 to $47.54.

— Rambus, a designer of memory chips, rose 52 cents, or 6 percent, to $8.55 after saying late Tuesday it had resolved a decade-old patent dispute with South Korean chipmaker Hynix. Hynix will pay Rambus $240 million over the next five years.

— Ulta Salon Cosmetics & Fragrance jumped $12.51, or 15 percent, to $96.84. The company reported late Tuesday that its income increased 20 percent in the latest quarter as shoppers streamed into the retailer's stores and website.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved