Thursday, 12 March 2015 02:42
NEW YORK: US stocks ended lower for a second session on Wednesday as worries increased about the timing of a Federal Reserve interest rate hike and dollar strength further dampened the outlook for U.S. earnings.
The move followed the S&P 500’s biggest one-day decline in two months in the previous session, which surpassed a selloff of similar magnitude on Friday. The S&P 500 is now off 3.6 percent from its March 2 record closing high and is down 0.9 percent for the year so far.
Friday’s stronger-than-expected jobs report is largely behind the recent rate jitters, solidifying views the Fed could raise rates as early as June.
“It’s all about rates. I think many are holding onto the view that if the Fed raises rates, stocks stop in their tracks and reverse, and the bull market ends,” said Bruce Zaro, chief technical strategist, Bolton Global Asset Management in Boston.
The Dow Jones industrial average fell 27.55 points, or 0.16 percent, to 17,635.39, the S&P 500 lost 3.92 points, or 0.19 percent, to 2,040.24 and the Nasdaq Composite dropped 9.85 points, or 0.2 percent, to 4,849.94.
The rate concerns have helped push up the dollar, as well, which has added to worries the currency will continue to weigh on U.S. multinationals’ earnings.
“The big story is the dollar, and it continues to strengthen. That is a double-edged kind of development in that it will lead to more investor interest in the United States, but on the other hand it hampers the ability of U.S. multinationals to compete overseas,” said John Carey, portfolio manager at Pioneer Investment Management in Boston.
Shares of Tyson Foods were down 5.6 percent at $ 37.55 and Pilgrims Pride Corp dropped 4.4 percent. The U.S. Department of Agriculture on Wednesday confirmed the discovery of highly pathogenic avian influenza in a commercial turkey flock in Arkansas.
Copyright Reuters, 2015
