U.S. stocks fell, pushing the Dow Jones Industrial Average to its biggest retreat in a month, as analyst ratings cuts and a drop in American factory orders spurred concern before the start of the earnings season. Two- year Treasury yields declined to a record.
The Dow lost 78.41 points, or 0.7 percent, to 10,751.27 at 4 p.m. in New York, the most since Sept. 7. The Standard & Poor’s 500 Index slipped 0.8 percent to 1,137.03. The yield on the two-year Treasury note fell to as low as 0.3987 percent. The MSCI Emerging Markets Index added 0.3 percent to the highest level since June 2008.
Goldman Sachs Group Inc. removed “buy” ratings on Microsoft Corp., J.C. Penney Co. and Macy’s Inc., while Deutsche Bank AG put Alcoa Inc. on its short-term “sell” list before the largest U.S. aluminum company starts the third-quarter earnings season on Oct. 7. Analysts are cutting forecasts for S&P 500 profits for the first time in more than a year as the economic rebound slows, jeopardizing the largest September rally since 1939.
“There’s some fear the soft patches we hit in the economy over the summer are going to be reflected in corporate earnings,” said Art Hogan, chief market analyst at New York- based Jefferies Group Inc. “That’s where we’re getting some of the caution that’s manifested today. Some of the department store names were downgraded. We had a great September and people are nervous we’re coming into an earnings season with irrational exuberance.”
Factory Orders
Manufacturing orders in the U.S. declined 0.5 percent in August, following a revised 0.5 percent increase a month earlier and exceeding the median estimate of a 0.4 percent drop from 64 economists in a Bloomberg survey.
The decline added to the S&P 500’s drop last week, its biggest since August. Stocks fluctuated earlier as weaker-than- expected factory orders overshadowed a separate report from the National Association of Realtors showing contracts to purchase previously owned homes climbed 4.3 percent, rising for a second month and suggesting the U.S. housing market is stabilizing.
Estimates for S&P 500 companies’ combined 2011 profit fell as low as $95.17 a share last month from an August high of $96.16 and posted the first quarterly reduction since the three months ended June 2009, according to more than 8,500 forecasts tracked by Bloomberg.
The revision came even as the benchmark gauge for U.S. equities rose 8.8 percent last month, the biggest September advance since 1939.
Earnings Season
Alcoa, which kicks off the earnings season on Oct. 7, fell 2.5 percent to $11.92. Monsanto Co. and Costo Wholesale Corp. will also report earnings this week.
The Stoxx Europe 600 Index dropped for a sixth day, slipping 0.5 percent in its longest losing streak since January 2009.
Volkswagen AG and Daimler AG led automakers to the biggest decline in the Stoxx 600 as German new-car sales tumbled 18 percent in September. Gas Natural SDG SA lost 3.6 percent after saying a ruling related to a dispute with Algeria’s Sonatrach may cut profit by as much as 450 million euros ($619 million).
The MSCI China Index of Hong Kong-traded shares advanced 1.5 percent after a September purchasing managers’ index released yesterday rose to 61.7 from 60.1 in August and Premier Wen Jiabao said the nation will stimulate domestic demand. Benchmark equity indexes in the Philippines and Indonesia advanced to records. Local Chinese exchanges were closed for a holiday.
‘Emerging Markets Is Answer’
“If you look for yield and you look for return, the answer is emerging markets,” Philip Poole, the global head of macro and investment strategy at HSBC Global Asset Management, which oversees more than $400 billion, said in an interview with Bloomberg Television’s “On The Move” with Francine Lacqua in London.
The euro weakened against all but 2 of its 16 most-traded peers. The common European currency depreciated 0.8 percent to $1.3687, snapping a four-day gain, and declined 0.6 percent against the yen to 114.10 yen. The Dollar Index, which tracks the U.S. currency against those of six major trading partners, advanced 0.5 percent, rebounding from its lowest level since January reached on Oct. 1.
The yield on the 10-year U.S. Treasury note declined 4 basis points to 2.47 percent, while the similar-maturity U.K. gilt yield dropped 4 basis points to 2.93 percent. The 10-year Greek yield slid 15 basis points to 10 percent. China plans to buy the nation’s bonds once Greece begins tapping international markets for funding again, Wen said two days ago. The extra yield investors demand to hold Greek 10-year debt instead of benchmark German bunds narrowed 10 basis points to 775 basis points today.
Hogs, Sugar
Hog futures slipped to the lowest level since February on signs that U.S. pork supplies are outpacing demand. Hogs for December delivery lost 1.3 percent to 71.9 cents a pound on the Chicago Mercantile Exchange, after touching 71.75 cents, the lowest price for a most-active contract since Feb. 25. The commodity has climbed 10 percent this year.
Raw sugar futures fell for a fourth day, capping the longest slide since May, as concern eased that drought will damage crops in Brazil, the world’s biggest producer. Sugar for March settlement lost 1.6 percent to 22.99 cents a pound on ICE Futures U.S. in New York.
Wheat futures declined 1.2 percent to settle at $6.4725 a bushel on the Chicago Board of Trade as rains in Russia and Eastern Europe improved the prospects for drought-strapped fields where famers are planting winter crops. The grain dropped for a sixth session, the longest losing streak in four months.
To contact the reporters on this story: Inyoung Hwang in New York at ihwang7@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.
http://jodnet.blogspot.com
The Dow lost 78.41 points, or 0.7 percent, to 10,751.27 at 4 p.m. in New York, the most since Sept. 7. The Standard & Poor’s 500 Index slipped 0.8 percent to 1,137.03. The yield on the two-year Treasury note fell to as low as 0.3987 percent. The MSCI Emerging Markets Index added 0.3 percent to the highest level since June 2008.
Goldman Sachs Group Inc. removed “buy” ratings on Microsoft Corp., J.C. Penney Co. and Macy’s Inc., while Deutsche Bank AG put Alcoa Inc. on its short-term “sell” list before the largest U.S. aluminum company starts the third-quarter earnings season on Oct. 7. Analysts are cutting forecasts for S&P 500 profits for the first time in more than a year as the economic rebound slows, jeopardizing the largest September rally since 1939.
“There’s some fear the soft patches we hit in the economy over the summer are going to be reflected in corporate earnings,” said Art Hogan, chief market analyst at New York- based Jefferies Group Inc. “That’s where we’re getting some of the caution that’s manifested today. Some of the department store names were downgraded. We had a great September and people are nervous we’re coming into an earnings season with irrational exuberance.”
Factory Orders
Manufacturing orders in the U.S. declined 0.5 percent in August, following a revised 0.5 percent increase a month earlier and exceeding the median estimate of a 0.4 percent drop from 64 economists in a Bloomberg survey.
The decline added to the S&P 500’s drop last week, its biggest since August. Stocks fluctuated earlier as weaker-than- expected factory orders overshadowed a separate report from the National Association of Realtors showing contracts to purchase previously owned homes climbed 4.3 percent, rising for a second month and suggesting the U.S. housing market is stabilizing.
Estimates for S&P 500 companies’ combined 2011 profit fell as low as $95.17 a share last month from an August high of $96.16 and posted the first quarterly reduction since the three months ended June 2009, according to more than 8,500 forecasts tracked by Bloomberg.
The revision came even as the benchmark gauge for U.S. equities rose 8.8 percent last month, the biggest September advance since 1939.
Earnings Season
Alcoa, which kicks off the earnings season on Oct. 7, fell 2.5 percent to $11.92. Monsanto Co. and Costo Wholesale Corp. will also report earnings this week.
The Stoxx Europe 600 Index dropped for a sixth day, slipping 0.5 percent in its longest losing streak since January 2009.
Volkswagen AG and Daimler AG led automakers to the biggest decline in the Stoxx 600 as German new-car sales tumbled 18 percent in September. Gas Natural SDG SA lost 3.6 percent after saying a ruling related to a dispute with Algeria’s Sonatrach may cut profit by as much as 450 million euros ($619 million).
The MSCI China Index of Hong Kong-traded shares advanced 1.5 percent after a September purchasing managers’ index released yesterday rose to 61.7 from 60.1 in August and Premier Wen Jiabao said the nation will stimulate domestic demand. Benchmark equity indexes in the Philippines and Indonesia advanced to records. Local Chinese exchanges were closed for a holiday.
‘Emerging Markets Is Answer’
“If you look for yield and you look for return, the answer is emerging markets,” Philip Poole, the global head of macro and investment strategy at HSBC Global Asset Management, which oversees more than $400 billion, said in an interview with Bloomberg Television’s “On The Move” with Francine Lacqua in London.
The euro weakened against all but 2 of its 16 most-traded peers. The common European currency depreciated 0.8 percent to $1.3687, snapping a four-day gain, and declined 0.6 percent against the yen to 114.10 yen. The Dollar Index, which tracks the U.S. currency against those of six major trading partners, advanced 0.5 percent, rebounding from its lowest level since January reached on Oct. 1.
The yield on the 10-year U.S. Treasury note declined 4 basis points to 2.47 percent, while the similar-maturity U.K. gilt yield dropped 4 basis points to 2.93 percent. The 10-year Greek yield slid 15 basis points to 10 percent. China plans to buy the nation’s bonds once Greece begins tapping international markets for funding again, Wen said two days ago. The extra yield investors demand to hold Greek 10-year debt instead of benchmark German bunds narrowed 10 basis points to 775 basis points today.
Hogs, Sugar
Hog futures slipped to the lowest level since February on signs that U.S. pork supplies are outpacing demand. Hogs for December delivery lost 1.3 percent to 71.9 cents a pound on the Chicago Mercantile Exchange, after touching 71.75 cents, the lowest price for a most-active contract since Feb. 25. The commodity has climbed 10 percent this year.
Raw sugar futures fell for a fourth day, capping the longest slide since May, as concern eased that drought will damage crops in Brazil, the world’s biggest producer. Sugar for March settlement lost 1.6 percent to 22.99 cents a pound on ICE Futures U.S. in New York.
Wheat futures declined 1.2 percent to settle at $6.4725 a bushel on the Chicago Board of Trade as rains in Russia and Eastern Europe improved the prospects for drought-strapped fields where famers are planting winter crops. The grain dropped for a sixth session, the longest losing streak in four months.
To contact the reporters on this story: Inyoung Hwang in New York at ihwang7@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.
http://jodnet.blogspot.com
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