NEW YORK - US stocks fell on Tuesday, led by a drop in technology shares after a disappointing outlook by Dell Inc., and as the Federal Reserve indicated it's still not done with raising rates.
Shares of Dell, the world's No. 1 PC maker, fell 9 per cent to US$29
on Nasdaq after hitting US$28.81, the lowest price in more than two years. Dell on Monday posted preliminary third-quarter earnings below expectations and lowered its revenue forecast.
The Dow Jones industrial average was down 21 points, or 0.20 per cent, at 10,418.78. The Standard & Poor's 500 Index was down 3.80 points, or 0.31 per cent, at 1,203.21. The technology-laced Nasdaq Composite Index was down 7.81 points, or 0.37 per cent, at 2,112.49.
Stocks briefly pared some declines after the Fed's announcement. The central bank's policy-making panel raised the benchmark interest rate a quarter point to 4 per cent, its highest level in more than four years, and said long-term inflation pressures remained "contained." Still, the Fed described monetary policy as "accommodative," hinting there's room to raise rates further, and said the economy's growth was still strong.
"Right now, it looks like they're still trying to get to neutral," said Edgar Peters, chief investment officer at PanAgora Asset Management Inc. in Boston. "It doesn't appear that they intend to stop raising rates any time soon. They clearly need to go higher than this." The disappointing Dell outlook helped drag other computer-related shares lower, analysts said. Intel Corp., which supplies chips for Dell's computers, fell 3.8 per cent to US$22.61.
Shares of financial stocks also fell after the Fed's rate decision, with the Philadelphia KBW index of bank stocks down 0.5 per cent. Bank of America Corp. fell 0.4 per cent to US$43.57 and Wells Fargo & Co. declined 0.7 per cent to US$59.77. Rising interest rates can make it more difficult for banks to make money.
Shares of Nabi Biopharmaceuticals plunged nearly 72 per cent to US$3.64 on Nasdaq after it said its experimental vaccine against staphylococcus aureus bacteria failed in a late-stage trial.
In takeover news, defence contractor Lockheed Martin Corp. and three private equity firms are considering a bid for Computer Sciences Corp., a technical services provider, according to a report in the Wall Street Journal.
Shares of Computer Sciences shot up 13.7 per cent to US$58.29 on the NYSE.
After the market opened, the Institute for Supply Management said its manufacturing index dipped to 59.1 in October from 59.4 in September. Economists in a Reuters survey had expected a median reading of 57.0. The prices paid index, a measure of inflation, rose to 84 last month, from 78 a month earlier.
- REUTERS
NEW YORK - US stocks fell on Tuesday, led by a drop in technology shares after a disappointing outlook by Dell Inc., and as the Federal Reserve indicated it's still not done with raising rates.
Shares of Dell, the world's No. 1 PC maker, fell 9 per cent to US$29
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