Poor China data, lower oil hit US share prices


10 November 2015

Tags: business, business news  financial news, business finance, small business websites

US stocks sank about one percent Monday as poor Chinese trade data and another fall in crude oil prices hit the market.

The losses came after a sixth straight week of gains, and analysts said a breather was due while crosscurrents of slower global growth, weak US corporate gains and an expected December rate hike by the Federal Reserve are weighed.

The Dow Jones Industrial Average finished down 179.85 points (1.00 percent) at 17,730.48.

The broad-based S&P 500 dropped 20.62 points (0.98 percent) to 2,078.58, while the tech-rich Nasdaq Composite fell 51.82 (1.01 percent) to 5,095.30.

Mace Blicksilver of Marblehead Asset Management said investors have a number of concerns, and that the market was “probably stronger than it should have been” last week.

“A little weak China data didn’t help,” he said, referring to another contraction in overall trade in China in October, with imports down 18.8 percent year-on-year and exports down 6.9 percent.

That poor picture for a key market hit Caterpillar, which led blue-chip losers, falling 2.6 percent. The strong dollar also again pummelled commodity prices, which underpin much of the heavy equipment maker’s global business.

The dollar also took a toll on online travel website Priceline, with its shares tumbling 9.6 percent after cutting its fourth-quarter earnings forecast. Priceline warned the strong greenback could hit its international earnings.

Construction timber specialist Plum Creek jumped 14.2 percent after it announced its merger with forestry and paper giant Weyerhauser in a share swap deal that valued Plum Creek shares nearly 14 percent above the average of the past month.

The two Seattle-based companies said the tie-up, with a combined earnings of $2.2 billion last year, is focused on taking advantage of the resurgent US housing construction sector. Weyerhauser shares fell 4.6 percent on the deal.

In other trade, Twitter shares sank 4.2 percent, and Berkshire Hathaway fell 1.6 percent after missing expectations on third-quarter operating earnings, which were hurt in part by higher insurance underwriting costs.

Tags: business, business news  financial news, business finance, small business websites




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