Do you know that you guys are public enemy no. 1? Now, keep buying bonds instead of selling them and get off their backs as they have lots of stocks to unload. -g-
biz.yahoo.com
<<Monday October 25, 4:53 pm Eastern Time
U.S. stocks end down, dogged by interest-rate fears
(Updates to close, new byline)
By Eric Wahlgren
NEW YORK, Oct 25 (Reuters) - U.S. stocks ended lower on Monday as Wall Street was still bedeviled by interest-rate fears.
The Dow Jones industrial average (^DJI - news) was down 120.32 points, or 1.15 percent, at 10,349.93.
The blue-chip index was dragged down mainly by oil companies and the financial services sector, which had staged a big rally on Friday on news of a political accord on a key U.S. bank reform bill.
In the broader market, declining issues outnumbered advances 18 to 11 on moderate volume of 768 million shares on the New York Stock Exchange.
''Public enemy No. 1 is the bond market and that is why there hasn't been any upside in the stock market,'' said Hugh Johnson, chief investment officer at First Albany Corp. in Albany, N.Y.
Driving the bond market lower were remarks from the European Central Bank's chief economist, Otmar Issing, that economic conditions are improving in Europe and there is an increased risk of inflation there.
''There are a number of factors that will affect long-term interest rates in the United States, and one of those is long-term foreign interest rates,'' Johnson said. ''If they rise, the odds are pretty good that the rates will rise in the U.S. The markets are interconnected.''
The Nasdaq composite index (^IXIC - news) was off 0.58 of a point, or 0.02 percent, at 2,815.94.
The Standard & Poor's 500 index (^SPX - news) was down 8.02 points, or 0.62 percent, at 1,293.63.
The 30-year U.S. Treasury bond was down 2/32, with its yield held at Friday's close of 6.35 percent. Early in the day, the long bond traded at a new two-year high of 6.40 percent.
''Financials got whacked because of the long bond and because they had run up so much on Friday on the bill in Congress,'' said Guy Truicko, portfolio manager at Unity Management in Lake Success, N.Y. ''Some of the oil companies were hurt because of lower-than-expected earnings.''
Six of the Dow's 30 components reported earnings but the largely solid results failed to rally the blue-chip sector.
''Earnings have been good, but not good enough to offset the perceived risk out there for the high prices of stocks,'' said Martin Yokosawa, a portfolio manager at Oberweis Asset Management in North Aurora, Ill.
In U.S. economic news, sales of existing homes fell by 2.1 percent in September, driven down by months of rising mortgage rates, according to the National Association of Realtors.
Sales of existing homes were at 5.13 million units at an annualized rate in September, down from the 5.24 million unit rate in August. Analysts polled by Reuters had expected September sales of 5.16 million units.
Among the Dow 30 components, American Express Co. (NYSE:AXP - news), which posted earnings that matched Wall Street's expectations, closed down 5-1/4 at 143-3/8.
J.P. Morgan & Co. Inc. (NYSE:JPM - news), the No. 3 U.S. commercial and investment bank, was down 4-7/16 at 120-3/16, and Citigroup Inc. (NYSE:C - news), the No. 1 U.S. financial services company, slipped 7/16 to 47-3/4.
Standard & Poor's banking index (^BIX - news) was off 9.08 points, or 1.46 percent, at 613.42.
Several major oil companies reported earnings, but even the solid results failed to spark much enthusiasm from investors.
Exxon Corp. (NYSE:XON - news), the No. 1 U.S. oil company and a Dow 30 member, beat analysts' forecasts with slightly stronger earnings but its stock was off 2-5/8 at 74-1/16.
Mobil Corp. (NYSE:MOB - news), the No. 2 U.S. oil company, said earnings rose more than 40 percent as improved commodity prices helped it overcome poor results from refining and marketing business. But Mobil, which is in the process of being acquired by Exxon, failed to meet expectations and its stock slumped 4-7/16 to 97-1/16.
Dow component Chevron Corp. (NYSE:CHV - news) reported earnings that fell short of expectations and its stock was down 4 at 90.
Texaco Inc. (NYSE:TX - news), the No. 4 U.S. oil company, also had disappointing results and its stock fell 7/8 to 62.
Among the remaining members in the Dow 30 index to post earnings, AT&T Corp. (NYSE:T - news), the No. 1 U.S. long-distance company, reported lower profits that still managed to beat expectations, and its stock rose 1-11/16 to 44-11/16.
Minnesota Mining & Manufacturing Co. (NYSE:MMM - news) finished up 1/4 at 92-13/16 after the industrial conglomerate known as 3M posted earnings that surpassed estimates.
Union Carbide Corp. (NYSE:UK - news), yet another Dow 30 component, saw its shares fall 3/8 to 59-1/2 after the chemicals company said its earnings fell.
An investor group including Berkshire Hathaway Inc. (NYSE:BRKa - news) (NYSE:BRKb - news) agreed to buy MidAmerican Energy Holdings Co. (NYSE:MEC - news) for $9 billion including debt. It is the first venture into the energy sector for billionaire Warren Buffett's high-profile Berkshire Hathaway. Shares in MidAmerican were up 6-1/8 at 33-3/8. And Berkshire's Class A shares jumped 1,000 to 55,500.
Lucent Technologies Inc. (NYSE:LU - news) rose 3-7/16 to 59-7/8 after the telecommunications equipment maker said it would join forces with Brazilian long-distance phone company Embratel to build Brazil's first nationwide high-speed data network. |
