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Stock market turns lower after cautious view from the Fed | |
(about 2 hours later) | |
NEW YORK — The stock market turned lower in afternoon trading after the Federal Reserve issued a cautious assessment of the U.S. economy in its latest policy statement. Technology companies fell sharply after Apple said iPhone sales were slowing and that it expected its first quarterly sales decline in 13 years. Energy stocks gained after the price of oil rose. Investors hoped that crude production would be cut, helping to alleviate a global glut of oil. | |
KEEPING SCORE: The Dow Jones industrial average fell 274 points, or 1.7 percent, to 15,891 as of 3:14 p.m. Eastern time. It was up slightly shortly before the Fed’s statement was released at 2 p.m. Eastern time. Steep declines in Apple and Boeing, which released a disappointing forecast, accounted for much of the Dow’s decline. | |
The Standard & Poor’s 500 index fell 30 points, or 1.6 percent, to 1,873. The Nasdaq composite, which has a high concentration of tech stocks, fell far more than the other two indexes, giving up 113 points, or 2.5 percent, to 4,454. | |
THE FED: The Federal Reserve said it was closely watching developments in the global economy and financial markets and how they might pressure the U.S. economy. It also said U.S. economic growth had slowed. Since the Fed’s last meeting in December, oil prices have plunged, stocks have swung wildly, and investors have become more concerned that China’s huge economic engine, a major driver of global growth, is sputtering. As expected, the Fed left its benchmark interest rate unchanged, after raising it for the first time in nearly a decade in December. | |
THE QUOTE: David Chalupnik, head of equities for Nuveen Asset Management, said investors hope that the Fed will move slowly in making future interest rate increases. Chalupnik, speaking shortly before the Fed released its latest policy statement, said he thinks the Fed will raise its key rate only one time this year, at its policy meeting in June. | |
“They should be backing off their intended path at this point,” he said, because economic growth in the U.S. has slowed a little. | |
OIL: The price of crude rose as investors hoped for cuts in fuel production. On Wednesday the head of Russia’s state oil pipeline monopoly said talks with OPEC and Saudi Arabia are in the works. Oil prices have plunged over the last year and a half because global supply is outstripping demand, creating a gigantic fuel glut. | |
Benchmark U.S. crude rose 85 cents, or 2.7 percent, to close at $32.30 a barrel in New York. Brent crude, the benchmark for international oils, rose $1.30, or 4.1 percent, to $31.10 a barrel in London. Oil prices also increased about 4 percent on Tuesday. | |
APPLE CORED: Apple slumped after it said growth in iPhone sales slowed in the fourth quarter. It also predicted a revenue decline in the current quarter, something that hasn’t happened since 2003. CEO Tim Cook said the strong dollar is hurting sales. The stock gave up $5.88, or 5.9 percent, to $94.11. | |
BIOGEN BOUNCES: Biotech drugmaker Biogen rose after its fourth-quarter earnings were stronger than expected. It added $17.57, or 6.8 percent, to $277.44. | |
GROUNDED: Aerospace and defense giant Boeing fell after its 2016 outlook came up short of analyst projections. Textron, which makes Cessna planes and Bell helicopters, also tumbled after its fourth-quarter profit and sales disappointed investors. Boeing stock lost $10.79, or 8.4 percent, to $117.22 and Textron fell $4.88, or 11.9 percent, to $33.25. | |
MORE MCMORAN: Freeport-McMoRan continued to climb, picking up 46 cents, or 11 percent, to $4.66. The copper and energy company rose almost 7 percent Tuesday after it announced plans to cut spending and production and eliminate more jobs. Activist investor Carl Icahn also disclosed he bought a stake in the company. The stock traded above $18 a year ago. | |
TUPPERWARE PARTY CANCELED: Tupperware’s fourth-quarter profit and sales fell far short of estimates, and its stock shed $7.50, or 14.6 percent, to $43.98. | |
TOTAL SYSTEM SLIDES: Electronic payment services provider Total System Services fell $6.89, or 15 percent, to $39.11 after its earnings fell short of estimates and it gave a weak profit forecast. | |
CURRENCIES: The euro rose to $1.0899 from $1.0853 and the dollar rose to 118.74 yen from 118.46 yen. | |
METALS: Gold fell $4.40 to $1,115.80 an ounce. Silver lost 10.5 cents to $14.459 an ounce. Copper gained 2.65 cents, or 1.3 percent, to $2.064 a pound. | |
OTHER ENERGY TRADING: Wholesale gasoline slipped to $1.0457 a gallon. Heating oil rose 5.8 cents, or 5.9 percent, to $1.025 a gallon. Natural gas added 0.9 cents to $2.189 per 1,000 cubic feet. | |
OVERSEAS: France’s CAC-40 added 0.5 percent while Germany’s DAX rose 0.6 percent. Britain’s FTSE 100 was 1.3 percent higher. The Shanghai Composite Index slid 0.5 percent, adding to Tuesday’s 6.4-percent loss. Japan’s Nikkei 225 rose 2.7 percent and Hong Kong’s Hang Seng was up 1 percent | OVERSEAS: France’s CAC-40 added 0.5 percent while Germany’s DAX rose 0.6 percent. Britain’s FTSE 100 was 1.3 percent higher. The Shanghai Composite Index slid 0.5 percent, adding to Tuesday’s 6.4-percent loss. Japan’s Nikkei 225 rose 2.7 percent and Hong Kong’s Hang Seng was up 1 percent |
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Marley Jay can be reached at http://twitter.com/MarleyJayAP. His work can be found at http://bigstory.ap.org/journalist/marley-jay | Marley Jay can be reached at http://twitter.com/MarleyJayAP. His work can be found at http://bigstory.ap.org/journalist/marley-jay |
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. | Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. |