U.S. stocks declined, with the Standard & Poor’s 500 Index poised for the lowest close since August, as the International Monetary Fund cuts it growth forecast and warned of “frothy” equities amid signs of slowing growth in Europe.
AGCO Corp. tumbled 10 percent to lead industrial shares lower after cutting its full-year earnings forecast. Delta Air Lines Inc. fell 1.2 percent to pace declines among carriers.
The S&P 500 dropped 1 percent to 1,945.17 at 2:57 p.m. in New York to the lowest level on a closing basis since Aug. 12. Selling accelerated after futures contracts on the S&P 500 expiring in December slipped below 1,940, a level where two previous declines had ended earlier today.
The Dow Jones Industrial Average lost 189.90 points, or 1.1 percent, to 16,802.90, while the Russell 2000 Index of small companies dropped 1 percent. Trading in S&P 500 (SPX) stocks was 11 percent above the 30-day average at this time of day. “It’s definitely a risk-off day with ugly European data and growth concerns and I think we’re seeing some of that negative sentiment just getting ahead of itself here,” Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone.
Treasuries rose, with yields on 10-year notes falling to a one-month low, and gold advanced a second day.
The IMF cut its outlook for global growth in 2015 and warned about the risks of rising geopolitical tensions and a financial-market correction as stocks reach “frothy” levels.
IMF Outlook
The S&P 500 fell yesterday for the first time in three days as small-cap shares resumed a selloff. The index has fallen 3.3 percent from a record reached Sept. 18 as the Fed remains on track to end bond purchases this month. The U.S. index is up 6.3 percent this year through yesterday and has not slid more than 10 percent in three years.
According to the IMF report, a sustained period of policy interest rates near zero in advanced economies has raised the risk that some financial markets may be overheating.
The IMF warning comes three months after the Fed said prices were stretched in some small-cap and biotechnology shares. Since then, the Nasdaq Biotechnology Index has rallied 6.6 percent, while the Russell 2000 has fallen 6 percent. Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said today at the Fortune’s Most Powerful Women Summit that stocks are now “in a zone of reasonableness.”
Data today showed German industrial production fell the most since 2009, underscoring the risk of slowdown in the region’s largest economy as concern grows that the European Central Bank’s stimulus won’t be enough to boost inflation and revive the economy.
Not Perfect
“A combination of not-perfect economic data and some geopolitical risk has put doubt in some investors’ minds and that brings some volatility,” Dan Curtin, the Boston-based global investment specialist at JP Morgan Private Bank, said in a phone interview. “The dollar surge, Hong Kong protests, Ebola scare and weakening oil prices, somewhere circled together in those things is the root of this recent pullback.”
In Spain health officials isolated two people to see if they’re infected with Ebola after a Madrid nursing assistant became the first person outside Africa to be diagnosed with the viral illness.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, rallied for seven weeks and closed at a four-year high on Oct. 3 as investors speculated on the timing of an interest-rate increase by the Federal Reserve. West Texas Intermediate oil fell below $90 a barrel last week for the first time in 17 months.
Meat, Potatoes
Investors will turn to corporate reports for clues on the strength of the U.S. economy, with Alcoa Inc. unofficially starting the earnings season tomorrow. Profit at companies in the S&P 500 rose 4.9 percent in the July-September period, according to the average estimate of analysts in a Bloomberg survey.
“We don’t have earnings data to drive us yet this week and let’s face it, that’s the meat and potatoes of the market,” Karyn Cavanaugh, the New York-based senior market strategist at Voya Investment Management LLC, said in a phone interview. The Federal Open Market Committee will release minutes from its Sept. 16-17 meeting tomorrow. Investors have been concerned the central bank may raise interest rates sooner than anticipated as the U.S. economy gains strength.
The Chicago Board Options Exchange Volatility Index (VIX) rose 6.8 percent to 16.51 today. The gauge known as the VIX jumped 36 percent in September, the most since July.
Industrial Stocks
Eight of the 10 main S&P 500 groups retreated today, with industrial stocks sinking 1.4 percent to pace declines.
AGCO sank 10 percent. The world’s third-largest maker of agricultural equipment cut its forecast because of lower sales in all regions and the stronger dollar.
Caterpillar Inc. slid 2.4 percent for the steepest drop in the Dow, while competitor Deere & Co. sank 2.6 percent and United Rentals Inc. plunged 5.9 percent.
Delta dropped 1.2 percent and United Continental Holdings Inc. fell 1.9 percent as carriers declined. The Bloomberg U.S. Airlines Index slid 1 percent.
Kosmos Energy Ltd. lost 4.5 percent after saying Blackstone Group LP and Warburg Pincus LLC, its largest shareholders, will sell 15 million shares. The company said it won’t receive any proceeds.
GT Advanced Technologies Inc. rose 133 percent. The maker of lab-grown sapphire used in mobile-device screens plunged 93 percent yesterday after filing for bankruptcy.
Keurig Green Mountain Inc. rose 4.8 percent for the second-biggest gain in the S&P 500. The stock advanced after Goldman Sachs Group Inc. opened coverage of the company with a buy rating.
source: Bloomberg
AGCO Corp. tumbled 10 percent to lead industrial shares lower after cutting its full-year earnings forecast. Delta Air Lines Inc. fell 1.2 percent to pace declines among carriers.
The S&P 500 dropped 1 percent to 1,945.17 at 2:57 p.m. in New York to the lowest level on a closing basis since Aug. 12. Selling accelerated after futures contracts on the S&P 500 expiring in December slipped below 1,940, a level where two previous declines had ended earlier today.
The Dow Jones Industrial Average lost 189.90 points, or 1.1 percent, to 16,802.90, while the Russell 2000 Index of small companies dropped 1 percent. Trading in S&P 500 (SPX) stocks was 11 percent above the 30-day average at this time of day. “It’s definitely a risk-off day with ugly European data and growth concerns and I think we’re seeing some of that negative sentiment just getting ahead of itself here,” Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone.
Treasuries rose, with yields on 10-year notes falling to a one-month low, and gold advanced a second day.
The IMF cut its outlook for global growth in 2015 and warned about the risks of rising geopolitical tensions and a financial-market correction as stocks reach “frothy” levels.
IMF Outlook
The S&P 500 fell yesterday for the first time in three days as small-cap shares resumed a selloff. The index has fallen 3.3 percent from a record reached Sept. 18 as the Fed remains on track to end bond purchases this month. The U.S. index is up 6.3 percent this year through yesterday and has not slid more than 10 percent in three years.
According to the IMF report, a sustained period of policy interest rates near zero in advanced economies has raised the risk that some financial markets may be overheating.
The IMF warning comes three months after the Fed said prices were stretched in some small-cap and biotechnology shares. Since then, the Nasdaq Biotechnology Index has rallied 6.6 percent, while the Russell 2000 has fallen 6 percent. Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said today at the Fortune’s Most Powerful Women Summit that stocks are now “in a zone of reasonableness.”
Data today showed German industrial production fell the most since 2009, underscoring the risk of slowdown in the region’s largest economy as concern grows that the European Central Bank’s stimulus won’t be enough to boost inflation and revive the economy.
Not Perfect
“A combination of not-perfect economic data and some geopolitical risk has put doubt in some investors’ minds and that brings some volatility,” Dan Curtin, the Boston-based global investment specialist at JP Morgan Private Bank, said in a phone interview. “The dollar surge, Hong Kong protests, Ebola scare and weakening oil prices, somewhere circled together in those things is the root of this recent pullback.”
In Spain health officials isolated two people to see if they’re infected with Ebola after a Madrid nursing assistant became the first person outside Africa to be diagnosed with the viral illness.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, rallied for seven weeks and closed at a four-year high on Oct. 3 as investors speculated on the timing of an interest-rate increase by the Federal Reserve. West Texas Intermediate oil fell below $90 a barrel last week for the first time in 17 months.
Meat, Potatoes
Investors will turn to corporate reports for clues on the strength of the U.S. economy, with Alcoa Inc. unofficially starting the earnings season tomorrow. Profit at companies in the S&P 500 rose 4.9 percent in the July-September period, according to the average estimate of analysts in a Bloomberg survey.
“We don’t have earnings data to drive us yet this week and let’s face it, that’s the meat and potatoes of the market,” Karyn Cavanaugh, the New York-based senior market strategist at Voya Investment Management LLC, said in a phone interview. The Federal Open Market Committee will release minutes from its Sept. 16-17 meeting tomorrow. Investors have been concerned the central bank may raise interest rates sooner than anticipated as the U.S. economy gains strength.
The Chicago Board Options Exchange Volatility Index (VIX) rose 6.8 percent to 16.51 today. The gauge known as the VIX jumped 36 percent in September, the most since July.
Industrial Stocks
Eight of the 10 main S&P 500 groups retreated today, with industrial stocks sinking 1.4 percent to pace declines.
AGCO sank 10 percent. The world’s third-largest maker of agricultural equipment cut its forecast because of lower sales in all regions and the stronger dollar.
Caterpillar Inc. slid 2.4 percent for the steepest drop in the Dow, while competitor Deere & Co. sank 2.6 percent and United Rentals Inc. plunged 5.9 percent.
Delta dropped 1.2 percent and United Continental Holdings Inc. fell 1.9 percent as carriers declined. The Bloomberg U.S. Airlines Index slid 1 percent.
Kosmos Energy Ltd. lost 4.5 percent after saying Blackstone Group LP and Warburg Pincus LLC, its largest shareholders, will sell 15 million shares. The company said it won’t receive any proceeds.
GT Advanced Technologies Inc. rose 133 percent. The maker of lab-grown sapphire used in mobile-device screens plunged 93 percent yesterday after filing for bankruptcy.
Keurig Green Mountain Inc. rose 4.8 percent for the second-biggest gain in the S&P 500. The stock advanced after Goldman Sachs Group Inc. opened coverage of the company with a buy rating.
source: Bloomberg