US Federal Reserve comments prompt downturn
San Francisco, CA -- (SBWIRE) -- 10/02/2012 -- The stock market took a dive on Tuesday with investors reacting negatively to a comment by a member of the U.S. Federal Reserve.
Closing numbers were:
TSX – 12,257.18 -56.36 -0.46 percent
S&P 500 – 13,457.55 -101.37 -0.75 percent
Dow – 13,457.55 -101.37 0.75 percent
Nasdaq – 3,117.73 -43.05 -1.36 percent
The S&P/TSX composite index dropped 56.36 points to 12,257.18, while the TSX Venture Exchange fell 20.25 points to 1,313.21.
The Canadian dollar was at 101.98 US, off 0.19 of a cent, as the U.S. currency tumbled in value.
Despite a seven-month high in U.S. consumer confidence, comments from a member of the U.S. Reserve took the wind from investors’ sails. Member Charles Plosser, president of the Bank of Philadelphia, suggested the Fed’s most recent stimulus efforts wouldn’t improve the economy.
The fallout was worse on Wall Street, where the Dow Jones industrials slipped by 101.37 points to 13,457.55. The Nasdaq composite index fell 43.05 points to 3,117.73 and the S&P 500 index was 15.30 points lower to 1,441.59.
Another contributing factor to investors’ wariness was Caterpillar Inc. – the world’s largest manufacturer of construction and mining equipment – lowering its expectations for a profit in 2015 owing to a sluggish global economy.
“Our view of the world right now is that we don’t think the markets will be propelled forward in the next month,” said Paul Vaillancourt, vice-president and chief investment officer at Canadian Wealth Management.
“We are anticipating a little bit of consolidation after a pretty good run. But having said that … we don’t think we’re going to see a significant sell off.”
In other segments, November crude on the New York Mercantile Exchange slid 56 cents to close at US$91.37 a barrel and the TSX energy sector fell 1.4%.
December bullion increased $1.80 to US$1,766.40 an ounce, while December copper gained 2.7 cents to US$3.76 a pound.
Statistics Canada reports that retail sales climbed 0.7 percent to $39 billion in July, mostly due to higher sales of automobiles and auto parts. This more than offset a June decline.
The Standard & Poor’s/Case Shiller index report indicated that U.S. home prices increased 1.2 percent nationally in July compared with July of 2011.
Forbes & Manhattan Coal Corp., of Canada, announced it would buy majority stakes in a functioning coal mine and undeveloped anthracite deposit in South Africa for roughly CDN$52.3 million and royalties. Its shares were ahead two cents to 67 cents.
In Europe, Spain plans to announce a new series of cost-cutting strategies and structural reforms that might entitle it to financial assistance from other eurozone nations. However, Spain has held off on applying for aid out of fear of strings attached.
Greece, meanwhile, will receive a deadline extension to reach its deficit reduction goals.
PutOption-CallOption.com (http://PutOption-CallOption.com) helps consumers beat brokers at their own game with a simple system of trading currency binaries. Binary trades are generated with a demo MT4 forex platform.
Copyright © 2005-2013 - SBWire, The Small Business Newswire - All Rights Reserved - Important Disclaimer
Contact Us: 888-4-SBWIRE (US) - 920-593-5640 (International)