The Dow Jones industrial average fell 40.80, or 0.4 percent,
to 11,403.28 in midday trading. It had surged 2.9 percent last week after the
Federal Reserved announced a $600 billion stimulus package for the US economy.
The Standard and Poor’s 500 index fell 3.98, or 0.3 percent,
to 1,221.87. The Nasdaq composite index slid 0.21, or 0.1 percent, to 2,578.84.
Technology companies were the only group among the 10
industry areas of the S and amp;P 500 index to post gains.
Financial companies were down the most, at 1.3 percent.
“Today is shaping up to be a modest sell-off and that’s to
be expected,” said Barnaby Levin, a managing director at HighTower Advisors.
Stocks have risen in recent weeks on better-than-expected
corporate earnings reports and the introduction of a bond-buying program by the
Federal Reserve that is intended to stimulate the economy by driving interest
rates lower and encouraging spending.
The dollar rose 0.7 percent against a broad basket of
currencies. That’s a negative for big US companies like Caterpillar Inc. that
do a lot of business overseas, since a higher dollar makes their products more
expensive in other countries. Caterpillar was off 1.1 percent, and Boeing Co.,
another big exporter, was off 1.9 percent, making it the biggest loser among
the 30 companies that make up the Dow.
Hewlett-Packard’s 1.4 percent gain made it the best
performing company among the 30 stocks that make up the Dow, followed by Bank
of America Corp. and Cisco Systems Inc. The Travelers Co. fell 1.5 percent as
the index’s laggard.
The euro fell 1.1 percent from recent highs, in part on
renewed concerns about the debt burdens of the weaker economies among countries
that use the Euro. Ireland announced Thursday that it would raise taxes and
seek additional cuts in government services to rein in its deficit. Yields on
10-year Irish bonds rose sharply in response. US markets had swooned this
spring over concerns that a fiscal crisis in Greece would spread to Portugal,
Spain and other weak economies in the euro zone.
Prices for Treasury bonds rose. The yield on the 10-year
Treasury bond fell slightly to 2.52 percent, from 2.53 percent late Friday.
Traders will get a better indication of consumer spending
later in the week as several major retailers announce earnings. Kohl’s Corp.,
Macy’s Inc. and J.C. Penny Co. Inc. will release their third-quarter earnings
starting Wednesday. Retailers such as The Gap Inc. and Macy’s rose more than 8
percent last week on better-than-expected October sales that suggest that
consumers will increase their spending this holiday season.
Leaders from the Group of 20 industrialized and developing
nations will meet Thursday and Friday in Seoul. Tensions have risen between the
group regarding trade imbalances and the respective strength of the Chinese yuan
and the dollar.
Officials from several countries have criticized the Fed’s
bond-buying program amid concerns that it will spark asset bubbles in emerging
economies. Representatives in Germany, Brazil, South Africa and China have
voiced objections to the plan and argued that it could lead to a surge in
commodity prices.
Precious metals rose, with gold posting a 0.2 percent gain
and silver jumping 2.3 percent.
Stronger dollar sends US stocks falling
Publication Date:
Mon, 2010-11-08 23:12
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