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AUGUST 10, 2018 / 5:05 pm
Wall Street ends lower as Turkey woes hit banks
DJ: 25,313.14 -196.09 NAS: 7,839.11 -52.67 S&P: 2,833.28
-20.30 8/10
NEW YORK (Reuters) - U.S.
stocks slid on Friday as a deepening economic crisis in Turkey dragged on bank
shares and triggered a move out of riskier assets. The Dow and S&P 500 posted declines for
the week following five straight weeks of gains, but the S&P 500 remains
just 1.4 percent below its record high from Jan. 26.
A
drop in technology shares added to the day’s bearish tone. The S&P technology index .SPLRCT
fell 0.8 percent, with Intel (INTC.O) down 2.6 percent after Goldman Sachs
downgraded the stock to “sell.” Microchip
Technology (MCHP.O) shares fell 10.9 percent after a
disappointing second-quarter revenue forecast.
A slump in the
Turkish lira TRYTOM=D3 worsened after U.S. President
Donald Trump doubled tariffs on steel and aluminum imported from the country.
Investors
fled to safe-haven assets,
pushing the dollar .DXY higher and weighing on U.S. bond yields US10YT=RR. “It was a classic risk-off move,” said Quincy Krosby, chief
market strategist at Prudential Financial in New Jersey. “You
worry about the collateral damage. You worry about the effects on Europe. You
have banks losing because
the 10-year U.S. Treasury (yield) came down.” The S&P financial index .SPSY fell 1.2
percent, among the biggest drags on the S&P 500.
The
Dow Jones Industrial Average .DJI fell 196.09 points, or 0.77 percent, to
25,313.14, the S&P 500 .SPX lost 20.30 points, or 0.71 percent, to
2,833.28 and the Nasdaq Composite .IXIC dropped 52.67 points, or 0.67 percent, to
7,839.11. For the week, the Dow fell 0.6 percent and
the S&P 500 dipped 0.3 percent. The Nasdaq gained 0.3 percent for the week
after strong gains in some technology shares.
Citigroup
(C.N), the most global of the major U.S. banks, fell
2.4 percent. JPMorgan (JPM.N), Wells Fargo (WFC.N) and Bank of America (BAC.N) were also lower.
“Any time that there’s any movement in
currencies, financials tend to reap the contagion risks,” said Jamie Cox,
managing partner for Harris FinancialGroup in Richmond, Virginia.
Shares of trade-sensitive companies also
declined, including Boeing (BA.N), 3M (MMM.N) and Caterpillar (CAT.N), which were all down at least 1
percent.
Tesla (TSLA.O) shares ended up 0.9 percent. The
number of Tesla shares sold short rebounded and are now higher than before
Chief Executive Elon Musk on Tuesday proposed taking the electric car maker
private, according to data from financial technology and analytics firm S3
Partners. Data on Friday showed U.S. consumer prices rose
in July and the underlying trend continued to strengthen, pointing to a steady increase in inflation
pressures.
Declining issues outnumbered advancing ones on the NYSE by a
2.10-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored decliners. The S&P 500 posted 12 new 52-week highs
and 10 new lows; the Nasdaq Composite recorded 87 new highs and 102 new lows.
About 6.7 billion shares changing hands on U.S. exchanges. That
compares with the 6.4 billion-share daily average for the past 20 trading days,
according to Thomson Reuters data.
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