Thursday, 26 March 2015 21:22
NEW YORK: US stocks dropped early Thursday amid worries about the Yemen crisis and the potential overvaluation of some equities, including in the biotech and semiconductor sectors.
About 35 minutes into trade, the Dow Jones Industrial Average stood at 17,629.85, down 88.69 points (0.50 percent).
The broad-based S&P 500 fell 9.41 (0.46 percent) to 2,051.64, while the tech-rich Nasdaq Composite Index lost 35.96 (0.74 percent) at 4,840.56.
Saudi Arabia led an Arab air assault against Huthi rebels in Yemen on Thursday in support of Yemen’s embattled president, a move labeled “dangerous” by regional rival Iran.
“What the news out of Yemen does is that it stirs the pot of consternation at the end of the quarter for the market, which has been grappling with valuation concerns, rate hike angst, earnings worries, and currency volatility to name a few other things,” said Patrick O’Hare of Briefing.com.
US oil prices rose above $ 50 a barrel as Kuwait beefed up security at oil facilities.
Analysts have pointed to growing concerns that US stocks are overvalued, particularly in biotechs, semiconductors and some other sectors. The upcoming first-quarter earnings season is expected to be weak.
Petroleum-linked stocks benefited from the rise in oil prices. Anadarko Petroleum added 0.6 percent, Marathon oil rose 1.2 percent and oil-services firm Weatherford International rose 2.0 percent.
Another large oil-services firm, Schlumberger, fell 0.5 percent after being fined $ 232.7 million by the US Justice Department for violating sanctions on Iran and Sudan.
Airline stocks were hit by higher oil prices and news that a pilot appeared to have intentionally caused the deadly Germanwings plane crash Tuesday. Delta Air Lines dropped 1.6 percent and United Continental fell 1.7 percent.
SanDisk, which manufacturers data storage devices, sank 17.5 percent, as it slashed its first-quarter revenue forecast to $ 1.3 billion from the previous $ 1.40-$ 1.45 billion.
Yoga-attire maker Lululemon Athletica rose 3.3 percent as revenues for the quarter ending February 1 jumped 15.6 percent to $ 602.5 million.
Bond prices fell. The yield on the 10-year US Treasury rose to 1.95 percent from 1.93 percent Wednesday, while the 30-year advanced to 2.53 percent from 2.51 percent. Bond prices and yields move inversely.
Copyright AFP (Agence France-Presse), 2015
