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US close: Stocks fall as tapering concerns continue to hit sentiment

By Benjamin Chiou

Date: Thursday 15 Aug 2013

US close: Stocks fall as tapering concerns continue to hit sentiment

- US benchmarks fall, Dow Jones drops 113 points
- PPI slows down in July to 2.1 per cent
- Macy's disappoints with Q2 results, guidance

Dow Jones: -0.73%
Nasdaq: -0.42%
S&P 500: -0.54%

US stocks finished firmly lower on Wednesday with the Dow Jones registering tripe-digit losses as speculation about an imminent tapering of Federal Reserve stimulus ramped up.

Retail bellwether Macy’s was also weighing on sentiment today as it disappointed with its second-quarter earnings report.

"The sell-off in the US came after another rise in US Treasury yields, to around 2.71%, on increasing expectations that the Fed will start tapering its asset purchases in September," said Market Analyst Craig Erlam from Alpari.

"While I still believe it won’t come until December, at the earliest, I am certainly in the camp that hopes it will happen in September. All these swings in the markets driven by fear of when the Fed will begin tapering is overshadowing the fundamentals once again and preventing the markets from functioning correctly."

US producer prices increased at a 2.1% annual rate in July, a slowdown from the 2.5% pace in June and below the 2.4% forecast. When compared month-on-month, producers prices were flat at a 0.8% gain in June (forecast: 0.3%). Core producer prices, which exclude food and energy, also came in below expectations.

Analyst Peter Newland from Barclays said that while the producer price data hints at further weakness ahead, “we continue to judge that the core consumer price inflation reached a trough on a year-on-year basis in June, and will gradually rise during H2. In large part this is likely to be driven by services components, such as shelter and medical care, which are not well covered by producer prices.”

Other economic data out today showed a 4.7% decline in applications for mortgage loans and refinancing during the week ended August 9th, according to the Mortgage Bankers Association. This was a sharp contrast to the 0.2% rise the week before.

Wall Street benchmarks were shrugging off the news that the Eurozone had exited its 18-month long recession in the second quarter - the region's gross domestic product (GDP) expanded by 0.3%, slightly beating the consensus estimate for growth of 0.2%.

Macy’s slumped after the department-store chain reduced its full-year profit forecast following “softer-than-anticipated” sales in the second quarter, blaming consumers’ “continuing uncertainty about spending on discretionary items in the current economic environment”.

The company said that earnings this year would now be $3.80-3.90 a share, slightly below the previous guidance range of $3.90-3.95.

Retail titan Wal-Mart edged lower ahead of its earnings release tomorrow.

The world’s largest farm-equipment maker, Deere & Co, fell despite beating expectations with its fiscal third-quarter results as it reported record earnings of $997m. The firm however did say that equipment sales would be down 5.0% in the final quarter of the year owing to tough comparatives with last year.

Cree plummeted after the maker of energy-efficient lighting products predicted earnings in the first quarter will be no more than $0.41 a share, missing estimates.


S&P 500 - Risers
Newmont Mining Corp. (NEM) $31.94 +6.18%
Nvidia Corp. (NVDA) $15.03 +4.23%
NRG Energy Inc. (NRG) $26.52 +3.92%
Peabody Energy Corp. (BTU) $17.88 +3.89%
Advanced Micro Devices Inc. (AMD) $3.82 +3.52%
J.C. Penney Co. Inc. (JCP) $13.11 +3.39%
Weyerhaeuser Co. (WY) $27.79 +2.96%
Best Buy Co. Inc. (BBY) $31.67 +2.62%
Cliffs Natural Resources Inc. (CLF) $24.54 +2.59%
Actavis Inc (ACT) $137.94 +2.45%

S&P 500 - Fallers
TripAdvisor Inc. (TRIP) $73.55 -9.15%
Moody's Corp. (MCO) $65.50 -5.07%
Macy's Inc. (M) $46.33 -4.47%
JDS Uniphase Corp. (JDSU) $14.23 -3.85%
Newfield Exploration Co (NFX) $23.54 -3.84%
Sherwin-Williams Co. (SHW) $170.06 -3.26%
McGraw Hill Financial Inc (MHFI) $61.53 -3.21%
Dean Foods Co. (DF) $10.27 -2.75%
Noble Corp (NE) $39.23 -2.70%
Duke Energy Corp. (DUK) $69.02 -2.54%

Dow Jones I.A - Risers
Bank of America Corp. (BAC) $14.60 +0.62%
Microsoft Corp. (MSFT) $32.35 +0.37%
Travelers Company Inc. (TRV) $82.18 +0.29%
Merck & Co. Inc. (MRK) $48.57 +0.29%
Intel Corp. (INTC) $22.57 +0.22%
Cisco Systems Inc. (CSCO) $26.38 +0.21%
AT&T Inc. (T) $34.77 +0.14%
Alcoa Inc. (AA) $8.16 +0.12%

Dow Jones I.A - Fallers
Home Depot Inc. (HD) $77.44 -2.52%
Johnson & Johnson (JNJ) $90.70 -2.48%
Boeing Co. (BA) $104.16 -1.95%
United Technologies Corp. (UTX) $105.06 -1.63%
Unitedhealth Group Inc. (UNH) $72.49 -1.17%
3M Co. (MMM) $117.62 -0.88%
Caterpillar Inc. (CAT) $85.82 -0.87%
Pfizer Inc. (PFE) $29.03 -0.82%
Wal-Mart Stores Inc. (WMT) $76.40 -0.60%
E.I. du Pont de Nemours and Co. (DD) $59.37 -0.57%

Nasdaq 100 - Risers
Nvidia Corp. (NVDA) $15.03 +4.23%
Randgold Resources Ltd. Ads (GOLD) $76.92 +3.15%
Apple Inc. (AAPL) $498.50 +1.82%
Vertex Pharmaceuticals Inc. (VRTX) $78.25 +0.93%
Twenty-First Century Fox Inc Class A (NWSA) $15.90 +0.44%
Wynn Resorts Ltd. (WYNN) $140.17 +0.39%
Microsoft Corp. (MSFT) $32.35 +0.37%
Intel Corp. (INTC) $22.57 +0.22%
Cisco Systems Inc. (CSCO) $26.38 +0.21%
eBay Inc. (EBAY) $54.23 +0.20%

Nasdaq 100 - Fallers
Comcast Corp. (CMCSA) $43.86 -2.21%
Baidu Inc. (BIDU) $138.51 -2.13%
Avago Technologies Ltd. (AVGO) $37.22 -2.10%
Altera Corp. (ALTR) $35.56 -2.04%
Monster Beverage Corp (MNST) $60.57 -1.99%
Equinix Inc. (EQIX) $171.85 -1.94%
Check Point Software Technologies Ltd. (CHKP) $57.72 -1.80%
Ross Stores Inc. (ROST) $66.64 -1.78%
Liberty Global plc Series A (LBTYA) $76.46 -1.72%
Linear Technology Corp. (LLTC) $39.64 -1.71%

BC

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