por admin » Mié Dic 28, 2016 2:25 pm
Dow Slides After Nearing 20000 Milestone
Trading volumes and market swings have been muted in 2016’s final week
By RIVA GOLD
Updated Dec. 28, 2016 1:34 p.m. ET
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U.S. stocks fell in quiet trading Wednesday as broad selling put the Dow Jones Industrial Average on pace for its biggest loss since the Federal Reserve raised interest rates.
The blue chip index declined 80 points, or 0.4%, to 19863 after ending Tuesday at its second-highest close in history but shy of the 20000 milestone. The S&P 500 fell 0.7% and the Nasdaq Composite lost 0.8%.
Trading volumes and market swings have been muted in 2016’s final week after expectations for stronger growth, tax cuts and reduced regulation helped propel stocks to record highs this month. The Dow industrials still remain poised to end the year nearly 15% higher while the S&P 500 is on track to add more than 11%.
“I’m pretty amazed to see records every day in the U.S. equity market,” said Igor de Maack, fund manager at DNCA Investments. “But if you don’t have an acceleration of macroeconomic growth and don’t have a consistent increase in the profitability of America Inc., you should not have that outperformance next year,” he said.
The Dow industrials closed within 0.25% of 20000 on Dec. 20, but investors waiting for the blue chip index to top the milestone could have to wait even longer: 191 trading sessions passed between the index’s close at 2999.75 in July 1990 and its first close above 3000 in April 1991, according to the WSJ Market Data Group.
An uptick in oil and metals prices lifted the basic resources sector. ENLARGE
An uptick in oil and metals prices lifted the basic resources sector. PHOTO: HASAN JAMALI/ASSOCIATED PRESS
Shares of technology and real estate companies were among the biggest decliners in the S&P 500, both falling more than 0.8%. Nvidia fell 5.6%, paring the semiconductor company’s 2016 gain to 239% while leaving it the best-performing stock in the S&P 500. Shares have been bolstered by strong earnings, driven by Nvidia’s gaming unit, which offers graphics processors used in PCs.
Caterpillar fell the most in the Dow industrials, losing 1.2%.
U.S. crude oil added 0.4% to $54.10 a barrel after settling at its highest level since July 2015 in the previous session. Traders have been waiting to see if major oil producers will deliver on pledges to curtail production starting next month.
Even though its influence has diminished somewhat toward the end of the year, “oil still feels like something you need to watch out for,” said Mitul Patel, head of interest rates at Henderson Global Investors.
Oil’s recent strength and stability have helped emerging-market assets weather a stronger dollar and supported the climb in inflation expectations that have pushed up bond yields, he said.
The Stoxx Europe 600 climbed 0.3%, following an upbeat session in Asia with miners and energy companies gaining, pushed by an uptick in oil and metals prices.
Markets in Italy and Spain slipped, while the Euro Stoxx Banks Index fell 0.2%. Shares of Banca Monte dei Paschi di Siena still weren’t trading after the European Central Bank said the lender had a far bigger hole in its balance sheet than previously calculated.
Earlier, a rise in mining companies helped send Australia’s S&P ASX 200 up 1% to its highest close since August 2015, while shares of Woolworths also boosted Australian markets after the retailer’s proposed sale of its fuels business to BP. Shares of BP gained 1% in London.
Hong Kong’s Hang Seng Index added 0.8%, while Japanese markets were flat. Shares in Toshiba fell 20%, weighing on Japanese markets, after the company warned about a multibillion-dollar write-down.
S&P 500 Leaders and Laggards - 1 Day
Last Chg % Chg Volume
Coach Inc. (COH) 35.01 +0.57 +1.66% 2.04M
Allergan PLC (AGN) 203.42 +2.93 +1.46% 2.17M
Constellation Brands Inc. Cl A (STZ) 152.09 +0.95 +0.63% 610,870
VeriSign Inc. (VRSN) 77.20 +0.45 +0.59% 387,648
Newmont Mining Corp. (NEM) 32.78 +0.19 +0.58% 3.37M
NVIDIA Corp. (NVDA) 109.28 -8.04 -6.85% 46.93M
Chesapeake Energy Corp. (CHK) 7.20 -0.38 -5.07% 50.36M
Mallinckrodt PLC (MNK) 49.77 -2.00 -3.86% 1.81M
First Solar Inc. (FSLR) 32.79 -1.20 -3.53% 1.16M
Mosaic Co. (MOS) 29.06 -0.98 -3.28% 1.76M
The dollar continued its upward trend in thin trading following Tuesday’s better-than-expected U.S. consumer confidence data. The WSJ Dollar Index added 0.3%, with the dollar up 0.2% against the yen at ¥117.7160. The euro weakened 0.6% against the dollar to $1.0399, while the British pound fell 0.3% to $1.2236.
The trade-weighted dollar has risen more than 10% since August, which is equivalent in terms of tightening financial conditions to roughly four interest rate rises in that period, according to Bespoke Investment Group. While U.S. stocks have held up well so far, some investors have begun to worry about the impact a further climb in the currency could have on multinationals and the U.S. economy next year.
In government bond markets, the yield on the 10-year Treasury fell to 2.522% from 2.563%, according to Tradeweb. Yields move inversely to prices.
— Aaron Kuriloff and Kenan Machado contributed to this article.