praveen
12-08-2009, 07:06 AM
US stocks skidded on Tuesday for a second day running as investors awaited the Federal Reserve's latest decision on monetary policy and its comments on the outlook for recovery from the sharp recession.
The Dow Jones Industrial Average fell 96.50 points (1.03 per cent) to finish at 9,241.45.
The tech-heavy Nasdaq composite points fell 22.51 points (1.13 per cent) to 1,969.73 and the broad-market Standard & Poor's 500 index retreated 12.75 points (1.27 per cent) to 994.35.
"The market is looking for excuses to take profits," said Cesare de Novellis of Meeschaert New York.
The major indices have surged roughly 15 per cent over the past four weeks, pushing the blue-chip Dow to its highest level since early November.
"Weakness among financial stocks led to a broad-based selling effort that resulted in the stock market's worst single-session per centage decline in one month," Briefing.com analysts said in a client note.
The market was focused on the Federal Open Market Committee's (FOMC) two-day meeting that opened Tuesday, which could offer hints of the timing of any rate hike and on the recovery.
The Fed, led by chairman Ben Bernanke, is widely expected to hold its near-zero interest rate policy unchanged when it announces the rate decision Wednesday.
"Markets await the conclusion of the Fed's policy meeting, which could give investors the next clue as to the future economic outlook," said Charles Schwab & Co. analysts.
Investors digested a sharply better-than-expected gain in productivity by US businesses. The Labor Department reported productivity jumped at an annualized rate of 6.4 per cent in the second quarter, the strongest advance since the 2003 third quarter.
Financials led the market lower, with the S&P sector index down 5.01 per cent.
Bank of America tumbled 4.98 per cent to 15.85 dollars. A federal judge delayed a decision on the bank's agreed 33-million-dollar settlement with the Securities and Exchange Commission (SEC) over bonuses paid by Merrill Lynch ahead of its acquisition.
Citigroup plummeted 6.35 per cent to 3.69 dollars after news that seven Norwegian towns brought to the brink of bankruptcy by the US subprime crisis have sued Citi for allegedly misleading them with high-risk investments.
Business lender CIT Group plunged 18.92 per cent to 1.20 dollars. The company, which appears on the verge of bankruptcy, delayed its quarterly earnings report to the SEC by a week.
Energy stocks were under pressure after OPEC forecast a slight fall in global demand in 2009. ExxonMobil dipped 0.91 per cent to 68.13 dollars and Chevron was down 1.86 per cent at 67.94 dollars.
In the tech space, Google slipped 0.59 per cent to 453.94 dollars after unveiling a new version of its Internet search engine, codenamed "Caffeine."
Rivals Microsoft and Yahoo!, which have teamed up their search operations, also weakened. Microsoft shed 1.24 per cent at 23.13 dollars and Yahoo! lost 1.16 per cent at 14.46 dollars.
The bond market firmed. The yield on the 10-year US Treasury bond fell to 3.693 per cent from 3.711 per cent Monday and that on the 30-year bond slid to 4.453 per cent from 4.526 per cent. Bond yields and prices move in opposite directions.
The Dow Jones Industrial Average fell 96.50 points (1.03 per cent) to finish at 9,241.45.
The tech-heavy Nasdaq composite points fell 22.51 points (1.13 per cent) to 1,969.73 and the broad-market Standard & Poor's 500 index retreated 12.75 points (1.27 per cent) to 994.35.
"The market is looking for excuses to take profits," said Cesare de Novellis of Meeschaert New York.
The major indices have surged roughly 15 per cent over the past four weeks, pushing the blue-chip Dow to its highest level since early November.
"Weakness among financial stocks led to a broad-based selling effort that resulted in the stock market's worst single-session per centage decline in one month," Briefing.com analysts said in a client note.
The market was focused on the Federal Open Market Committee's (FOMC) two-day meeting that opened Tuesday, which could offer hints of the timing of any rate hike and on the recovery.
The Fed, led by chairman Ben Bernanke, is widely expected to hold its near-zero interest rate policy unchanged when it announces the rate decision Wednesday.
"Markets await the conclusion of the Fed's policy meeting, which could give investors the next clue as to the future economic outlook," said Charles Schwab & Co. analysts.
Investors digested a sharply better-than-expected gain in productivity by US businesses. The Labor Department reported productivity jumped at an annualized rate of 6.4 per cent in the second quarter, the strongest advance since the 2003 third quarter.
Financials led the market lower, with the S&P sector index down 5.01 per cent.
Bank of America tumbled 4.98 per cent to 15.85 dollars. A federal judge delayed a decision on the bank's agreed 33-million-dollar settlement with the Securities and Exchange Commission (SEC) over bonuses paid by Merrill Lynch ahead of its acquisition.
Citigroup plummeted 6.35 per cent to 3.69 dollars after news that seven Norwegian towns brought to the brink of bankruptcy by the US subprime crisis have sued Citi for allegedly misleading them with high-risk investments.
Business lender CIT Group plunged 18.92 per cent to 1.20 dollars. The company, which appears on the verge of bankruptcy, delayed its quarterly earnings report to the SEC by a week.
Energy stocks were under pressure after OPEC forecast a slight fall in global demand in 2009. ExxonMobil dipped 0.91 per cent to 68.13 dollars and Chevron was down 1.86 per cent at 67.94 dollars.
In the tech space, Google slipped 0.59 per cent to 453.94 dollars after unveiling a new version of its Internet search engine, codenamed "Caffeine."
Rivals Microsoft and Yahoo!, which have teamed up their search operations, also weakened. Microsoft shed 1.24 per cent at 23.13 dollars and Yahoo! lost 1.16 per cent at 14.46 dollars.
The bond market firmed. The yield on the 10-year US Treasury bond fell to 3.693 per cent from 3.711 per cent Monday and that on the 30-year bond slid to 4.453 per cent from 4.526 per cent. Bond yields and prices move in opposite directions.