Stronger dollar sends stocks falling
NEW YORK — Stocks pulled back Monday as the dollar rose and traders retreated from a rally that brought indexes to their highest levels since the peak of the financial crisis in September 2008.
The Dow Jones industrial average fell 40.80, or 0.4 percent, to 11,403.28 in mid-day trading. It had surged 2.9 percent last week after the Federal Reserved announced a $600 billion stimulus package for the U.S. economy.
The Standard and Poor’s 500 index fell 3.98, or 0.3 percent, to 1,221.87. The Nasdaq composite index slid 0.21, or 0.1 percent, to 2,578.84.
Technology companies were the only group among the 10 industry areas of the S&P 500 index to post gains. Financial companies were down the most, at 1.3 percent.
“Today is shaping up to be a modest sell-off and that’s to be expected,” said Barnaby Levin, a managing director at HighTower Advisors.
Stocks have risen in recent weeks on better-than-expected corporate earnings reports and the introduction of a bond-buying program by the Federal Reserve that is intended to stimulate the economy by driving interest rates lower and encouraging spending.
The dollar rose 0.7 percent against a broad basket of currencies. That’s a negative for big U.S. companies like Caterpillar Inc. that do a lot of business overseas, since a higher dollar makes their products more expensive in other countries. Caterpillar was off 1.1 percent, and Boeing Co., another big exporter, was off 1.9 percent, making it the biggest loser among the 30 companies that make up the Dow.
Hewlett-Packard’s 1.4 percent gain made it the best performing company among the 30 stocks that make up the Dow, followed by Bank of America Corp. and Cisco Systems Inc. The Travelers Co. fell 1.5 percent as the index’s laggard.
The euro fell 1.1 percent from recent highs, in part on renewed concerns about the debt burdens of the weaker economies among countries that use the Euro. Ireland announced Thursday that it would raise taxes and seek additional cuts in government services to rein in its deficit. Yields on 10-year Irish bonds rose sharply in response. U.S. markets had swooned this spring over concerns that a fiscal crisis in Greece would spread to Portugal, Spain and other weak economies in the euro zone.
Prices for Treasury bonds rose. The yield on the 10-year Treasury bond fell slightly to 2.52 percent, from 2.53 percent late Friday.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- New boutique hotel to replace Oxford’s Downtown Inn
- Coast city to repay BP grant funding for Ocean Expo
- Eye clinic operator faces Medicaid fraud charges
- Mega-load move could cause traffic issues
- NEW ORLEANS SAINTS MOVING — Mississippi company has the task of moving the football team
- New owners plan cautious change for Highland Village
- Judge to weigh Hood's credit card issuer lawsuit
- Blue Origin successfully tests BE-3 rocket engine
- Allain to lie in repose at Capital Friday; funeral Saturday in Natchez
- Northrop Grumman begins production of five NATO drones