Stocks Drop as Treasuries, Dollar Advance Before Fed’s Statement

AppId is over the quota
AppId is over the quota
September 21, 2011, 12:06 PM EDT By Stephen Kirkland and Michael P. Regan

Sept. 21 (Bloomberg) -- Stocks fell, sending the Standard & Poor’s 500 Index down for a third day, while U.S. Treasuries rose as investors awaited a statement from the Federal Reserve for signs of the central bank’s plans to bolster the economy.

The S&P 500 slipped 0.3 percent to 1,198.27 at 11:40 a.m. in New York and the Stoxx Europe 600 Index lost 1.7 percent. The Dollar Index pared gains to trade little changed. Ten-year U.S. Treasury yields fell three basis points to 1.91 percent, near a record low of 1.877 percent set Sept. 12. The pound dropped 0.7 percent versus the dollar after the Bank of England said officials considered ways to add stimulus to the economy.

The Fed may say today it will replace short-term Treasuries in its $1.65 trillion portfolio with long-term bonds, a move that 61 percent of economists surveyed by Bloomberg said will probably fail to lower the 9.1 percent unemployment rate.

“The Fed may do something, but don’t expect instantaneous gratification on the economy,” Mickey Levy, the New York-based chief economist at Bank of America Corp., said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “Bond yields are already ridiculously low.”

The Fed is scheduled to issue its policy statement at about 2:15 p.m. in Washington. Republican lawmakers urged Fed Chairman Ben S. Bernanke to refrain from additional monetary easing to avoid “further harm” to the U.S. economy, saying Americans have reason to be “skeptical” of his plans. Senator Charles Schumer, a Democrat from New York, in a statement yesterday said the move was “a heavy-handed attempt to meddle in the Fed’s independent stewardship of monetary policy” and should be ignored.

Coal, Railroad Companies

Commodity producers in the S&P 500 fell 1.8 percent as a group for the biggest drop among 10 industries. Alpha Natural Resources Inc. and Walter Energy Inc., two U.S. producers of coal used in steelmaking, tumbled at least 7.9 percent after they cut output and sales forecasts respectively. Railroad companies also slumped after the forecasts, with CSX Corp. and Norfolk Southern Corp. sliding more than 6 percent.

Oracle Corp. rose 7 percent, leading technology companies to the only gain among 10 groups, after the software maker reported profit that topped analysts’ estimates following increased spending on database programs and applications that help run businesses. Hewlett-Packard Co. rallied 3.7 percent after two people familiar with the matter said the company’s board plans to consider ousting Leo Apotheker as chief executive officer.

Housing Market

U.S. equities briefly turned higher after sales of existing homes increased more than forecast. Purchases of existing houses, which are tabulated when a contract closes, increased 7.7 percent to a five-month high 5.03 million annual rate, figures from the National Association of Realtors showed. The median forecast of economists surveyed by Bloomberg News called for a 4.75 million rate.

About three shares declined for each that gained in the Stoxx 600, which jumped 1.8 percent yesterday. Automakers and basic-resource companies were the biggest drag on the index, as PSA Peugeot Citroen and Daimler AG lost more than 3 percent. Deutsche Lufthansa AG sank 5 percent as Europe’s second-largest airline said it expects fuel expenses to climb and Deutsche Bank AG downgraded the shares.

European banks slipped 1.7 percent as a group. The government debt crisis has generated as much as 300 billion euros ($410 billion) in credit risk for the region’s banks, the International Monetary Fund said, calling for capital injections. Fighting in Europe over ways to prevent contagion and delays in implementing agreed measures are raising concerns about the risk of defaults by governments, the IMF said. Banks face “funding challenges” because of investor concern about their potential losses from government bonds, with some relying heavily on the European Central Bank for liquidity, it said.

‘Full Mission’

A “full mission” will return to Athens next week after Greek Finance Minister Evangelos Venizelos made “good progress” in talks with the European Union and the International Monetary Fund yesterday, according to the EU.

The Dollar Index, which tracks the U.S. currency against those of six trading partners, climbed for the third time in the past four days, while the euro erased earlier losses versus the dollar and pared its drop against the yen. The Swiss franc depreciated 0.8 percent against the euro and lost 0.7 percent versus the dollar, falling for the fourth consecutive day.

U.K. Ponders Stimulus

The pound weakened against nine of 16 major peers and the U.K.’s FTSE-100 Index of stocks lost 1.7 percent. Bank of England officials today said they may need to buy more bonds to bolster to boost the U.K. economy. Most policy makers said it was “increasingly probable that further asset purchases to loosen monetary conditions would become warranted at some point,” the minutes of the Monetary Policy Committee’s Sept. 7- 8 meeting showed.

The MSCI Emerging Markets Index fell 0.8 percent, heading for the lowest close since July 2010. Russia’s Micex Index retreated 0.8 percent and the ruble declined for a ninth day against the central bank’s target dollar-euro basket, headed for its longest stretch of declines since February 2009. The Shanghai Composite Index jumped 2.7 percent after the Conference Board said its leading indicator index rose in July.

Oil rose 0.7 percent to $87.56 a barrel in New York, reversing a drop of as much as 1.3 perc ent after the U.S. Department of Energy reported that crude inventories fell by 7.34 million barrels.

--With assistance from Claudia Carpenter, Andrew Rummer, Daniel Tilles and Jason Webb in London, Shiyin Chen in Singapore and Jimi Corpuz in New York. Editor: Michael P. Regan

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Michael P. Regan in New York at mregan12@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

View the original article here

Peliculas Online

Posted in: Advance,Before,dollar,Statement,stocks,Treasuries