U.S. stocks fall on economic worries, Spain

U.S. stocks fall on economic worries, Spain
# 26 September 2012 01:53 (UTC +04:00)
Baku-APA.U.S. stocks pared earlier gains and ended lower on Tuesday, with the broad S&P 500 posting the worst day in three months, as worries about economic growth and Spain overshadowed several upbeat U.S. economic data, APA reports quoting Xinhua.

When the market closed, the Dow Jones Industrial Average dropped 101.37 points, or 0.75 percent, to 13,457.55, led by Caterpillar. The S&P 500 Index lost 15.30 points, or 1.05 percent, to 1,441.59, registering a fourth straight loss. The Nasdaq Composite Index continued to be weighed by Apple, and declined 43. 05 points, or 1.36 percent, to 3,117.73.

On Tuesday, the equity market was heavily pressured as Spain’s demonstration against the new round of austerity measures intensified.

Thousands of Spanish demonstrators protested in Madrid on Tuesday as the government was preparing new austerity plans for the 2013 budget to be announced later this week. Worries over Spain’s financing problems and the euro zone’s debt crisis triggered sell-off across the markets.

The declines worsened after the Federal Reserve Bank of Philadelphia President Charles Plosser said the U.S. central bank’ s new mortgage bond-buying program, known as QE3, will have little impact on boosting economic growth or lowering unemployment. He also said the move could harm the Fed’s credibility.

All 10 S&P sectors ended lower, with technology and basic material leading the loss.

The Dow component Caterpillar fell sharply by 4.25 percent after the construction and mining equipment maker cut its earnings expectation for 2015, citing the worse-than-expected global economic growth.

Stocks had been higher in early trading as the latest batch of economic data showed the recovery in the U.S. housing sector was stronger than expected and consumer sentiment jumped to a seven- month high.

According to the Standard & Poor’s Case-Shiller home price index, average home prices in 20 major cities increased by 1.6 percent in July. The data beat previous forecasts and confirmed the recent positive news about housing, showing the most-battered housing sector was gradually bottoming out. In addition, the U.S. consumer confidence index, complied by the research group Conference Board, increased to 70.3 in September, up from 61.3 in August. The result was far better than economists’ median expectation, which ranged from 63 to 65.

In the other markets, the U.S. crude lost on economic growth concerns and ended at 91.37 dollars a barrel, while the Brent crude rose to 110.45 dollars a barrel on geographic tension.

The gold edged up to 1,766.4 dollars per ounce, boosted by the positive economic data. The dollar rose moderately against the most major currencies.
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