05/06/2013 - June
- Mark Densel
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June 5 Daily Market
Market News
Wall Street ends down on fears the Fed could reduce incentives
Stocks ended lower on Tuesday, resuming their recent decline as investors sold growth-oriented sectors on speculation the Federal Reserve may slow the pace of its economic stimulus.
The move follows a retreat of about 2 percent in the last two weeks from the seven-month term benefits, which was mainly due to continued economic support from the central bank.
"It seems that perhaps investors are tiring at the time of long stock, while (the market has) been in this trading range. Was unable to renew their enthusiasm, and I think that's attractive investors to" lock in profits, said All Luschini, chief investment strategist at Jenny Montgomery Scott in Philadelphia.
He said that the S & P 500 seemed to be slowly approaching its 50-day moving average, which is around 1602.
"The market took the form of heavy feel to it," he added.
Growth-oriented sectors have been hit the hardest, a switch from last week, as investors took profits in high-dividend stocks. S & P financial index fell 0.9 percent, while the index of telecommunications grew by 0.9 percent.
Kansas City Federal Reserve Bank President Esther George, who relentlessly criticizes the bond-buying program and voted against it at every meeting of the Fed this year, once again called on the Fed to come off its aggressive purchases. George said that the slowdown in bond purchases would help wean the financial markets and their dependence on ultra-easy money from the U.S. central bank.
Index Dow Jones Industrial Average fell 76.49 points, or 0.50 percent, to 15,177.54. 500 The Standard & Poor's was down 9.04 points, or 0.55 percent, to 1,631.38 during the day, but remains at 14.4 percent for the year.
The Nasdaq Composite Index was down 20.11 points, or 0.58 percent, to 3,445.26.
Dow decline over a 20-week contract revenue on Tuesdays.
All three indexes were down more than 1 percent during the session. Intraday volatility of the market has picked up since minutes from the last meeting of the U.S. central bank and recent remarks by Fed Chairman Ben Bernanke has heightened concerns the Fed may lower the rate of its bond-buying program sooner than expected.
Market breadth was also negative, with advancers outpacing decliners on the New York Stock Exchange by almost 12:58.
Dollar General Corp fell 9.2 percent to $ 48.64, the worst performer on the percentage of S & P 500, after the discount chain cut off the top end of its full-year profit forecast. The company also warned that slows the growth of sales and reduced margins as frugal shoppers make it difficult to raise prices.
Salesforce.com Inc shares slid 7.9 percent to $ 37.80 after it said it would pay $ 2.5 billion for marketing software maker ExactTarget ExactTarget Inc. shares rose 52.4 percent to $ 33.69.
Driving Salesforce.com decline was investors' fears that the rate at $ 33.75 per share, will reduce the margin in the near future.
Although defensive sectors have outperformed the sector growth in most of the rally this year, they look less attractive to the second half of the year, Goldman Sachs analysts wrote in a research note. They recommend underweighting health care and consumer products.
Trading volume was about 6.8 billion shares traded on the New York Stock Exchange, Nasdaq and NYSE MKT, slightly above the average daily volume of closing about 6.4 billion shares this year.
Advancers outpaced decliners on Nasdaq at 12:58