By Rita Nazareth and Tara Lachapelle
Nov. 29 (Bloomberg) -- U.S. stocks fell, sending the Dow Jones Industrial Average toward its lowest close in seven weeks, as Ireland?s bailout failed to ease investor concern that Europe?s debt crisis may spread to the southern region.
Hewlett-Packard Co. and United Technologies Corp. slumped at least 1.7 percent, pacing the decline in the Dow. Visa Inc. lost 2.6 percent as Sanford C. Bernstein & Co. said mobile- network operators may take market share. Starbucks Corp. slid 2.6 percent after Kraft Foods Inc. said it would challenge the coffee-shop chain?s attempt to end a distribution agreement.
The Standard & Poor?s 500 Index slipped 0.8 percent to 1,179.57 as of 12:29 p.m. in New York. The Dow lost 116.03 points, or 1.1 percent, to 10,975.97, the lowest level since Oct. 7 on a closing basis.
?There seems to be plenty to bother the market,? said E. William Stone, who oversees about $105 billion as chief investment strategist at PNC Wealth Management in Philadelphia. ?There?s concern about the European financial crisis affecting healthier economies and the viability of the euro. This issue seems to be far from over. I?m not sure that the market is going to be happy with much of anything right now.?
The S&P 500 is still 15 percent above this year?s low on July 2 as companies reported better-than-estimated profits and the Federal Reserve?s plan to increase asset purchases lifted stock prices. The equity benchmark has fallen about 4 percent since reaching a two-year high on Nov. 5 amid concern the sovereign-debt crisis will spread to southern Europe and speculation China will raise interest rates to tame inflation.
Global Stocks
Global stocks have dropped for three straight weeks, pushing the MSCI World Index down 5.5 percent since Nov. 5. Ten- year bond yields soared in Portugal, Spain and Italy while the euro slipped to $1.3093 against the dollar, a two-month low.
Ireland, swamped by the bursting of a decade-long real- estate bubble and unemployment approaching 14 percent, became the second country to tap European assistance. The government said it will pay average interest of 5.8 percent on the package, which breaks down to 45 billion euros ($60 billion) from European governments, 22.5 billion euros from the International Monetary Fund and 17.5 billion euros from Ireland?s cash reserves and national pension fund.
Technical Levels
The S&P 500?s decline sent the index as low as 1,173.64 today, below its 50-day moving average, currently about 1,177, for the first time since September, data compiled by Bloomberg show. Technical analysts who base investment decisions on price charts say retreats below such levels often lead to faster declines.
?It does have questionable significance because it has not been tested since early September,? said Katie Stockton, a technical analyst at Stamford, Connecticut-based MKM Partners. ?Obviously, we don?t want to see a breakdown below it.? Should the S&P 500 fall below its 50-day average for two consecutive days, the gauge may slide to the 1,130-1,135 range, she said, while adding that she does not expect that to occur.
Hewlett-Packard had the biggest decline in the Dow, falling 2.1 percent to $42.28. The world?s biggest computer maker was sued by shareholders seeking information about the company?s ouster of former Chief Executive Officer Mark Hurd.
United Technologies, the maker of Pratt & Whitney jet engines, lost 1.7 percent to $74.01. International Business Machines Corp., the world?s largest computer-services provider, dropped 1.5 percent to $141.74.
Visa, Kraft
Visa retreated 2.6 percent to $73.49, while MasterCard slid 1.1 percent to $232.67. The two biggest payments networks face the threat of losing market share to companies that offer mobile payments at point of sale, Bernstein?s analyst Rod Bourgeois wrote in a note today.
Starbucks dropped 2.6 percent to $30.33. Kraft fell 1.4 percent to $29.88. Kraft said it initiated an arbitration proceeding over a pact to distribute coffee to grocery stores. Since the companies began working together, Starbucks? retail- grocery coffee business has grown from $50 million to $500 million in annual revenue, Kraft said. Starbucks said Kraft didn?t meet its responsibilities to ?protect and promote? its brands.
Retailers fell even after the National Retail Federation reported a 6.4 percent increase in retail sales over the weekend. About 212 million shoppers went to stores and websites over the holiday weekend, spending $365.34 on average. The proportion of sales online rose to more than one-third of the total, the highest ever.
?Very Strong?
?The retail space looks very strong,? said Timothy Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York, which manages $2 billion. ?Certainly the data that we?ve seen looks very good in terms of retail for the holiday season with the sales so far above expectations.?
Amazon.com Inc., the largest online retailer, rose 1.1 percent to $179.19. Macy?s Inc., the second-biggest U.S. department-store chain, declined 2.2 percent to $25.42.
Banks had the biggest gain among 24 groups in the S&P 500. Wells Fargo & Co. rose 1.7 percent to $27.09 as RBC Capital Markets said it expects the largest U.S. home lender to be among the first allowed by regulators to increase payouts early next year. Bank of America Corp. added 1.3 percent to $11.26. Citigroup Inc. rose 1 percent to $4.15.
--With assistance from Sarah Gill in New York and Alexis Xydias in London. Editors: Stephanie Borise, Michael P. Regan
To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Tara Lachapelle in New York at tlachapelle@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.
No comments:
Post a Comment