NEW YORK - US stocks turned negative in the last half hour of trading on Tuesday, with the Nasdaq dropping for the 10th day in 11, amid fears the Fed may need to raise interest rates to fight inflation even as economic growth slows.
Jittery from two straight weeks of
equity market turbulence, investors were not convinced of a recovery when gains in global commodity prices briefly lifted energy and metals companies such as Exxon Mobil Corp. and Alcoa Inc.
"A lot of people understand the market sell-off that occurred last week may have deeper legs and we may see a longer correction," said John Person, president of Nationalfutures.com, an investment advisory service in Palm Beach, Florida. "Commodity prices are rising sharply again, which is inflationary. The Fed has sent a message that it will be vigilant in containing inflationary pressures." The Dow Jones industrial average fell 26.98 points, or 0.24 per cent, to end at 11,098.35. The Standard & Poor's 500 Index slipped 5.49 points, or 0.43 per cent, to finish at 1,256.58. The Nasdaq Composite Index dropped 14.10 points, or 0.65 per cent, to close at 2,158.76.
Interest-rate-sensitive brokerage and investment banking shares were among the S&P 500's top decliners. JPMorgan Chase & Co. fell 1.1 per cent, or 47 cents, to US$42.17, while Wachovia Corp. shed 1.4 per cent, or 76 cents, to US$52.95, both on the New York Stock Exchange.
EXXON FALLS DESPITE HIGHER OIL PRICES
Exxon shares fell 0.6 per cent, 39 cents, to close at US$60.39 on the NYSE, shifting gears from being the top gainer on the S&P 500 to becoming its biggest drag.
Shares of Alcoa, the world's biggest aluminum producer, lost 1 per cent, or 31 cents, to US$30.84 on the NYSE.
US crude oil for July delivery rose US$1.80 to settle at US$71.76 a barrel, driven in part by predictions that the United States could be in for a rough Atlantic hurricane season this year that could disrupt supplies.
COMEX gold for June delivery jumped US$16 to US$673.70 an ounce. Higher oil prices supported bullion prices as a hedge against inflation.
Shares of Wyeth fell following the disclosure that an experimental anti-depressant caused nausea in many patients in a clinical trial. Wyeth shares dropped 2.9 per cent, or US$1.43, to US$47.40 on the NYSE.
TOLL BROTHERS AND GOOGLE GAIN
A stronger-than-expected quarterly profit from luxury home builder Toll Brothers Inc. helped the housing sector. The company's stock rose as high as US$28.60 during the session, but ended up only 1.7 per cent, or 45 cents, at US$27.35.
Shares of Web companies jumped as a JPMorgan analyst speculated that a wave of large-cap mergers could be imminent in the internet sector. Google Inc. advanced 1.3 per cent, or US$4.63, to US$375.58. Yahoo Inc. shares added 1 per cent, or 30 cents, to US$30.76.
Trading was heavy on the New York Stock Exchange, where declining shares beat advancing shares by a ratio of about 6 to 5. About 1.91 billion shares changed hands on the Big Board, above the 1.61 billion daily average for last year.
On Nasdaq, decliners outnumbered advancers by a ratio of about 5 to 4, with about 2.20 billion shares traded, above the 1.8 billion daily average last year.
- REUTERS
NEW YORK - US stocks turned negative in the last half hour of trading on Tuesday, with the Nasdaq dropping for the 10th day in 11, amid fears the Fed may need to raise interest rates to fight inflation even as economic growth slows.
Jittery from two straight weeks of
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