Wall Street plummets since June 20 as 10-year yield surges

English>>Business

Editor's Pick

Wall Street plummets since June 20 as 10-year yield surges

(Xinhua) 08:13, August 16, 2013

Email|Print|Comments

twitter

facebook

Sina Microblog

U.S. stocks plummeted on Thursday, with the major stock indices posting their biggest drops since June 20, as the 10-year U.S. Treasury yield hit a two-year high.

The Dow Jones Industrial Average slumped 225.47 points, or 1.47 percent, to 15,112.19 points. The Standard & Poor's 500-stock Index lost 24.07 points, or 1.43 percent, to 1, 661.32 points. The Nasdaq Composite Index dropped 63.15 points, or 1.72 percent, to 3, 606.12 points.

The blue-chip Dow and the broader S&P 500 fell to their lowest levels in more than one month, while the 10-year Treasury yield reached its highest level of 2.82 percent in two years on Thursday amid the ongoing worries about when the U.S. Federal Reserve will start to trim its monetary stimulus policy.

Other economic data came in mixed. The number of Americans who initially applied for jobless benefits in the week ending Aug. 10 decreased 15,000 to a seasonally adjusted number of 320,000, the lowest level in nearly six years, the Labor Department reported Thursday.

Meanwhile, the U.S. Consumer Price Index (CPI) for all urban consumers increased 0.2 percent in July on a seasonally adjusted basis, and the so-called "core" CPI for all items excluding food and energy also rose 0.2 percent in the past month, the third straight increase, the Labor Department said in a separate report.

Manufacturing activity in the New York region increased at a slightly slower pace in August compared with that in July, the Federal Reserve Bank of New York said Thursday in a survey. Meanwhile, industrial production remained unchanged in July after having gained 0.2 percent in June, according to the Federal Reserve.

"The under-expected U.S. production reminds us starkly that manufacturing is not expanding as fast as economists had hoped. So far, there is no clear direction where manufacturing is headed in the third quarter," Mei Li, an economic analyst at FTN Financial, commented in a note on Thursday.

Besides, U.S. builder confidence for August in the market for newly built, single-family homes rose to 59, according to the National Association of Home Builders and Wells Fargo. This fourth consecutive monthly gain brought the index to its highest level in nearly eight years.

A couple of downbeat corporate earnings reports added negative sentiment to the stock market. Wal-Mart Stores shares slipped 2.60 percent to 74.41 U.S. dollars as the world's largest retailer disclosed a disappointing earnings report for the second quarter of the year Thursday.

Cisco Systems shares also dipped 7.17 percent to 24.49 dollars a day after the network equipment maker reported quarterly earnings which beat market expectations by a penny but said it would slash 4,000 jobs amid uncertain demand for its products.

Shortly after the closing bell, Dell posted its earnings and revenue for the second quarter both of which surpassed market consensus. The personal computer maker's shares still dropped slightly in after-hours trading.

The CBOE Volatility Index, widely considered as a fear gauge of the market, leapt 12.96 percent to end at 14.73.

All key S&P sectors finished lower, with techs leading the losses.

In other markets, oil prices went up on Thursday as unrest in Egypt bolstered concerns that oil supplies from Middle East may be disrupted.

Light, sweet crude for September delivery rose 48 cents, to settle at 107.33 dollars a barrel on the New York Mercantile Exchange. While Brent for September delivery went up 91 cents, to close at 111.11 dollars a barrel.

Gold future for December delivery on the COMEX division of the New York Mercantile Exchange advanced 27.5 dollar to settle at 1, 360.9 dollars per ounce on a weaker dollar on Thursday.

The U.S. dollar retreated against most major currencies on Thursday amid mixed U.S. economic data. In late New York trading, the euro rose to 1.3347 dollars from 1.3259 dollars of the previous session and the dollar bought 97.39 Japanese yen, lower than 98.14 yen of the previous session.