US stocks retreat; Dow record winning streak ends

GMT 16:33 2014 Wednesday ,11 June

Arab Today, arab today US stocks retreat; Dow record winning streak ends

Traders work on the floor of the New York Stock Exchange
New York - AFP

The Dow Wednesday snapped a four-day streak of record highs in a US equity retreat attributed in part to a shock Republican primary election and profit taking.
The Dow Jones Industrial Average slumped 102.04 points (0.60 percent) to 16,843.88.
The broad-based S&P 500 fell 6.90 (0.35 percent) to 1,943.89, while the tech-rich Nasdaq Composite Index dipped 6.07 (0.14 percent) to 4,331.93
The losses came after the World Bank trimmed its 2014 global growth forecast to 2.8 percent from its January forecast of 3.2 percent.
Jack Ablin, chief investment officer at BMO Private Bank, said the World Bank report "sent a sorry signal to investors this morning."
Ablin also cited the unexpected defeat of House Republican Majority Leader Eric Cantor in a Virginia primary battle with Tea Party-backed insurgent David Brat.
Cantor "was one of the biggest friends of Wall Street and the election of somebody openly antagonistic to Wall Street" sparked worries, Ablin said.
Other analysts said the World Bank report and the Cantor loss were less significant factors in the stocks retreat than investor fatigue following the recent rally.
Cantor's defeat is "a convenient excuse to do some profit taking," said analyst Patrick O'Hare.
A profit warning from German airline Deutsche Lufthansa sent US airline shares lower, including American Airlines (-3.1 percent)), Delta Air Lines (-2.9 percent) and United Continental Holdings (-5.2 percent). Lufthansa said its bleaker outlook was due to disappointing passenger sales and the impact of strikes, among other factors.
Dow component Boeing fell 2.3 percent following a downgrade by RBC Capital, which said there is little room for upside following three years of record orders. "Most of the good news for Boeing is already out there" and "this is reflected in the stock," the note said.
Ulta Salon, Cosmetics & Fragrance shot up 13.8 percent following a strong quarter that included comparable-store sales growth of 8.7 percent. The company opened 21 new stores during the quarter.
Tech company Synaptics bolted 29.0 percent higher after bumping up its quarterly revenue guidance from $275-$295 million to $300-310 million. The company also announced the $475 million acquisition of Renesas SP Drivers, which makes components for smartphones and tablets.
Bond prices were unchanged. The yield on the 10-year US Treasury held steady at 2.64 percent, the same level as Tuesday, while the 30-year was flat at 3.47 percent. Bond prices and yields move inversely.

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