Stocks, Bonds Kick Off November With Declines
Stocks were solidly lower Tuesday as nervous investors continued to monitor the run-up to the 2016 election and wait for news from the Federal Reserve, which will conclude a two-day policy meeting Wednesday.
The Dow Jones industrial average was down 188 points, or 1%, to 17,950 as of 2:25 p.m. Eastern Time. The Standard & Poor’s 500 index fell 27 points, or 1.3%, to 2,099 and the Nasdaq composite declined 71 points, or 1.4%, to 5,118.
U.S. IN FOCUS: Increasingly, investors’ focus has been the presidential election, as polls between Hillary Clinton and Donald Trump appear to have tightened after last week’s news that the FBI had opened a new investigation into Clinton’s private email server. The narrowing in the race has introduced a new element of uncertainty into financial markets, something that analysts say is likely to keep trading in check.
There were signs of nervousness in the market. Gold prices rose, and the Mexican peso, whose decline has become a proxy for Trump’s chances of winning, has been falling steadily against the U.S. dollar since Friday. The peso is down almost 2% against the dollar, a significant move in currency trading.
STOP THE PRESSES: Shares of newspaper company Tronc, which publishes the Los Angeles Times and the Chicago Tribune, plunged $2.08, or 17%, to $9.95 after Gannett said it would stop its bid to buy the company. Gannett fell 15 cents, or 2%, to $7.62.
MADE IN AMERICA: U.S. manufacturing grew last month at the fastest pace since July, a sign that American factories are coping with economic weakness overseas and a strong dollar. The Institute for Supply Management says its manufacturing index came in at 51.9, up from 51.5 in August. Anything above 50 signals growth. Production and export orders grew faster in October.
FED WATCH: The Federal Reserve started its two-day meeting Tuesday. The nation’s central bank is widely expected to not to raise interest rates this time.
DELICIOUS: The spin-off of Yum Brands’ operations in China jumped $1.89, or 8%, to $26.11 on its first day of trading. Yum’s flagship brand, KFC, has been a success story in China for decades and is by far the largest fast-food franchise in the country. Yum had been pressured by activist shareholders to spin off its China operations.
CATCH A COLD: Drugmaker Pfizer fell 80 cents, or 2.5%, to $30.92 after the company reported that third-quarter profits plunged 38%, despite higher sales. The mediocre results missed Wall Street expectations, and Pfizer lowered the top end of its 2016 profit forecast.
ENERGY: U.S. benchmark oil futures fell 19 cents to $46.67 a barrel on the New York Mercantile Exchange. Brent crude, the international standard, fell 65 cents to $47.95 a barrel.
BONDS AND CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 1.84% from 1.83%. In currency trading, the euro rose to $1.1064 from $1.0969 and the dollar fell to 103.90 yen from 104.90 yen.
METALS: Precious and industrial metals futures closed broadly higher. Gold climbed $14.90 to $1,288 an ounce, silver rose 62 cents to $18.42 an ounce and copper increased 2 cents to $2.23 a pound.
Article by Associated Press.