Wall Street drops three days in a row
US stocks suffered a third straight late-day sell-off yesterday suggesting it may be difficult to chalk further gains as the year comes to a close.
After hitting two-year highs this week, a sustained rise in Treasury yields has sparked worry that rising borrowing costs could stifle the recovery. Banks, heavily dependent on loan demand, faded and ended lower for a third straight day. The sense among investors is that the market, after rising almost 11 per cent so far in 2010, has run its course for the year.
Major averages and stocks that have led the rally have exhibited a familiar pattern in recent days, spiking early and succumbing to selling late as investors see stocks hitting resistance.
Apple ended the day flat at $320.36, up just 0.02 per cent after rising as high as $323 earlier in the day. Netflix closed nearly flat, up just 0.03 per cent at $178.50 – off its high of $181.42.
The Dow Jones industrial average slipped 19.07 points, or 0.17 per cent, to 11,457.47. The Standard & Poor’s 500 Index shed 6.36 points, or 0.51 per cent, to 1,235.23. The Nasdaq Composite Index dropped 10.50 points, or 0.40 per cent, to close at 2,617.22.
Industrial production rose in November at its fastest pace in four months, implying that a self-sustaining recovery is now entrenched
Sentiment on the volatile day started lower after Moody’s warned Spain its debt rating could be downgraded, bringing concerns about the eurozone debt crisis back to the forefront and lifting the dollar, which has had a strong inverse relationship with equities of late.
Honeywell International fell 1.9 per cent to $51.54 after it gave a 2011 profit growth outlook that analysts described as conservative. Caterpillar rose 1.1 per cent to $93.08 after RBC raised its price target to $108 from $98.
A deal that President Barack Obama struck with Republicans to extend the Bush-era tax rates sailed through the US Senate yesterday and will soon head to the House of Representatives, where it could face steeper opposition, though it is still expected to pass.
About 7.82bn shares traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq, well below the year’s daily average of 8.62bn.