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Wall Street falls as global selloff continues

English.news.cn   2014-01-28 06:58:41

NEW YORK, Jan. 27 (Xinhua) -- U.S. stock market fell after fluctuating trading Monday as selling in stocks around the world entered its third day.

The Dow Jones Industrial Average lost 41.23 points, or 0.26 percent, to 15,837.88. The S&P 500 shed 8.73 points, or 0.49 percent, to 1,781.56. The Nasdaq Composite Index plunged 44.56 points, or 1.08 percent, to 4,083.61.

Asian and European stocks extended losses Monday after being hit last week by growing concerns about economic prospects and political instability in some emerging markets as well as speculation over the U.S. Federal Reserve's continued withdrawal of its stimulus, which weighed on Wall Street.

The Fed will start a two-day policy meeting Tuesday. It is expected that the U.S. central bank would expand tapering of the quantitative easing program, after it decided a month ago to initiate a cut of its monthly bond purchases by 10 billion U.S. dollars starting in January.

Selling in U.S. stocks accelerated, following disappointing housing data released by the Commerce Department Monday, with U.S. sales of new single-family houses in December decreasing 7 percent to a seasonally adjusted annual rate of 414,000 compared with the previous month.

However, the major indices recouped part of earlier losses as traders believed that the U.S. equity market would weather the selling pressure given a strengthening recovery in the world's largest economy along with increasing corporate earnings albeit not as strong as expected.

Jeremy Siegel, finance professor at the Wharton School of the University of Pennsylvania, said Monday in an interview with CNBC that the U.S. market was still under the fair value despite the correction.

What happened last week was due to market anxiety caused by the memories of the Asian crisis in 1997, he noted, adding that selloff was overreaction.

Shares of Caterpillar, a Dow component, rallied 5.94 percent to 91.29 dollars after the heavy equipment maker revealed robust quarterly earnings, underpinning the blue-chip Dow which outperformed the other two indices.

After the closing bell, Apple posted its quarterly revenues and earnings, both beating market consensus. But the giant tech's shares still sank in after-hours trading as its guidance missed analysts' forecasts.

All three major indices registered a drop of nearly 2 percent in the last trading day of the previous week due to the rout in stocks and currencies of some emerging markets as well as fears over the Fed's tapering.

The CBOE Volatility Index, widely considered as a fear gauge of the market, dipped 3.97 percent to 17.42.

In other markets, oil prices fell Monday on the worse-than- expected new home sales.

Light, sweet crude for March delivery moved down 92 cents to settle at 95.72 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery lost 1.19 dollars to close at 106.69 dollars a barrel.

Gold futures on the COMEX division of the New York Mercantile Exchange declined slightly Monday, with the most active gold contract for February delivery down 0.9 dollar to settle at 1,263. 4 dollars per ounce.

The U.S. dollar gained against major currencies on Monday ahead of the Fed's policy meeting. In late New York trading, the euro lost to 1.3669 dollars from 1.3677 of the previous session, and the greenback bought 102.74 Japanese yen, higher than 102.3 yen of the previous session.

Editor: Mu Xuequan
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