While you were sleeping: Wall St slides from record highs
By Margreet Dietz
Sept. 22 (BusinessDesk) - Wall Street weakened, declining from record highs, as investors assessed the impact of the
Federal Reserve’s intentions to raise interest rates once more this year.
On Wednesday, at the end of a two-day meeting, the Federal Open Market Committee flagged that it still plans another
rate hike in 2017, while it also announced it will start unwinding its balance sheet next month.
“The meeting was definitely more hawkish than what the market was anticipating,” Mary Ann Hurley, vice president in
fixed income trading at DA Davidson in Seattle, told Reuters. “We were definitely not pricing in another rate hike for
this year.”
Interest rate futures are now pricing in a 75 percent chance of a December increase, up from about 56 percent at the
start of the Fed meeting on Wednesday, according to CME’s FedWatch tool.
“Clearly the Fed doesn’t have answers on the 2017 low inflation weakness but they’re still very sensitive to falling
behind the curve so they want to stay in front of the inflation curve,” Michael Dowdall, investment strategist at BMO
Global Asset Management, told Reuters.
Wall Street retreated. In 3.11pm trading in New York, the Dow Jones Industrial Average fell 0.1 percent, while the
Nasdaq Composite Index declined 0.3 percent. In 2.56pm trading, the Standard & Poor’s 500 Index slid 0.2 percent.
Earlier in the day the Dow touched a record high of 22,412.59.
The Dow fell as declines in shares of Procter & Gamble and those of Apple, recently down 2 percent and 1.4 percent respectively, outweighed gains in shares of General
Electric and those of Goldman Sachs, recently up 1.4 percent and 0.9 percent respectively.
In the latest US jobs data, a Labour Department report showed initial claims for state unemployment benefits
unexpectedly for the week ended September 16, falling 23,000 to a seasonally adjusted 259,000. A Labor Department
official said hurricanes Harvey and Irma affected claims for Texas and Florida, according to Reuters.
Separately, a Philadelphia Fed report showed its manufacturing index rose to 23.8, the highest reading in three months
and up from 18.9 in August.
In the latest corporate deal news, shares of Calgon Carbon skyrocketed, up 62 percent as of 3.09pm in New York, after
the company said it agreed to be acquired by Japan’s Kuraray for US$1.1 billion.
In Europe, the Stoxx 600 Index added 0.3 percent from the previous close. Germany’s DAX Index rose 0.3 percent, while
France’s CAC 40 Index climbed 0.5 percent.
The UK’s FTSE 100 Index fell 0.1 percent.
Gold, copper, iron ore and other metals slid amid the spectre of a US interest rate increase as well as Standard & Poor’s downgrade of China’s credit rating.
(BusinessDesk)
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