Stocks falter at the opening, following European markets lower on austerity protestsBy AP
Wednesday, September 29, 2010
Stocks slip as European protests worsen debt fears
NEW YORK — Stocks slipped in muted trading Wednesday as traders held back ahead of corporate earnings announcements, which start to roll in next week. Protests in Europe against austerity measures renewed worries about the region’s finances and helped keep buyers at bay.
The dollar fell further against other currencies as traders anticipate more action by the Federal Reserve to push U.S. interest rates down. Gold climbed past $1,300.
Most sectors fell on the stock market except for energy, which rose after crude oil prices gained. Schlumberger Ltd., Occidental Petroleum Corp. and other companies rose after the price of crude oil jumped on news that inventories fell last week. Benchmark crude for November delivery rose $1.68 to settle at $77.86 a barrel on the New York Mercantile Exchange.
Trading was relatively subdued with no major economic reports or corporate earnings due out. Third-quarter earnings season gets under way Oct. 7 with Alcoa Inc.
“The big drivers of the market were just absent today,” said Kim Caughey, an equity research analyst at Fort Pitt Capital Group in Pittsburgh. “Everyone is sitting around waiting for earnings season to begin.”
Wednesday’s decline in U.S. stocks marked another pause in a monthlong rally that has made this September one of the strongest for U.S. stocks in history. With only one trading day left this month, the Dow Jones industrial average is on track for its best September since 1939 with a gain of 8.2 percent so far. It’s still up only 3.9 percent for the year.
The Dow Jones industrial average lost 22.86, or 0.2 percent, to close at 10,835.28
The Standard & Poor’s 500 index slipped 2.97, or 0.3 percent, to 1,144.73, and the Nasdaq composite fell 3.03, or 0.1 percent, to 2,376.56.
European markets fell as demonstrators gathered in Brussels, where the European Union is based, and in several of the bloc’s member countries to protest austerity measures aimed at preventing another crisis like the one that required a bailout of Greece earlier this year. The protests raised concerns that countries like Spain will not be able to implement policies required to heal their bloated public finances.
Kate Warne, investment strategist at Edward Jones in St. Louis, said the protests in Europe suggest those countries will have trouble implementing austerity measures and that that’s spooked markets there.
“Governments will have more difficulty making cuts to get their budgets in order,” she said.
U.S. stocks swooned this spring as a fiscal crisis in Greece appeared to be spreading to other weak European economies like Portugal and Spain. A relative calm in European markets since then has allowed U.S. stocks to rise sharply.
Rising stocks narrowly outpaced falling ones on the New York Stock Exchange, where volume came to 1 billion shares.
Bond prices edged lower. The yield on the 10-year Treasury note edged up to 2.50 percent from 2.47 percent late Tuesday.
There’s a growing certainty within the bond market that the Federal Reserve will attempt to spur economic activity through pushing long-term interest rates down further. To do that, the Fed would buy more Treasurys, lifting bond prices and lowering yields. That would also keep downward pressure on the dollar.
Schlumberger rose $1.23, or 2 percent, to $61.52, while Occidental Petroleum rose $1.12, or 1.5 percent, to $76.63.
Gold rose $2 to $1,310.30, a day after settling above $1,300 for the first time.
The euro rose to as high as $1.3647 Wednesday, its strongest point since mid-April. In late trading in New York, the euro was worth $1.3643, up from $1.3567 late Tuesday.
Tags: Commodity Markets, Europe, Greece, New York, North America, Protests And Demonstrations, Spain, United States, Western Europe