Aug 14, 2013
August 14, 2013
Compiled 20:45 GMT
Compiled 20:45 GMT
By DAVID D. KIRKPATRICK
The scale and brutality of the attack on supporters of the ousted president, Mohamed Morsi, was the clearest sign yet that the old Egyptian police state was re-emerging in full force.
By RICK GLADSTONE
The violence on Wednesday reinforced fears that the political ideals once envisioned in the so-called Arab Spring revolutions may be unattainable.
By MARK LANDLER and MICHAEL R. GORDON
Secretary of State John Kerry, who was speaking on behalf of a vacationing President Obama, did not disclose any specific American response to the crackdown.
By MANJARI MILLER
For India and China, bitter memories of foreign domination play a vital role in how they perceive the outside world.
By SUZANNE DALEY and NICHOLAS KULISH
As German towns work to hide the emptiness, demographers say a similar fate awaits other European countries, with frightening implications for the economy.
By ALISON SMALE
With a month to go in her re-election campaign, Chancellor Angela Merkel faces disdain from Germany's intelligentsia and questions about American surveillance efforts.
By ISABEL KERSHNER
Israeli war planes struck two sites in Gaza in response to rocket fire, demonstrating the steep obstacles the negotiations face.
Wall Street at Close Report by MarketWatch August 14, 2013: U.S. stocks decline; Dow off over 100 points.
U.S. stocks decline; Dow off over 100 pointsBy Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks fell sharply on Wednesday, with the first triple-digit drop for the Dow since June, as investors worried about the recent spike in borrowing costs as well as the timing and pace of potential reductions in the Federal Reserve’s bond purchases.
“It looks like tapering is going to begin in September,” with the consensus view expecting the Fed to cut its $85 billion in monthly bond purchases to between $60 billion and $65 billion a month, said Rick Robinson, regional chief investment officer for Wells Fargo Private Bank.
So, instead of buying a trillion on an annualized basis, the Fed’s asset purchases would be trimmed to between $700 and $750 billion, said Robinson. “That’s not tightening by any stretch of the imagination; they are still growing their balance sheet,” he added.
Watch Apple, Macy's
John Shipman joins the News Hub with a look at which stocks traders will be watching during market action, including Apple, Macy's and Cree.
Pointing to Tuesday’s 10 basis-point move in the 10-year Treasury yield 10_YEAR -0.37% back above 2.70%, Robinson said that “there is the slow realization that over time, and it’s not going to happen tomorrow, that rates are going to normalize, so we’ll see the 10-year slowly go above 3%.”
On Wednesday, the 10-year yield 10_YEAR -0.37% , used in setting mortgage rates and other consumer loans, fell 2 basis points to 2.711%.
After a 134-point drop, the Dow Jones Industrial Average DJIA -0.73% finished down 113.35 points, or 0.7%, at 15,337.66, with 22 of its 30 components in the red, led by home-improvement retailer Home Depot Inc. HD -2.52% , down 2.5%.
Cisco Systems Inc. CSCO -8.94% erased losses, with the technology company and Dow component ending up 0.2% ahead of its quarterly results after the close.
The S&P 500 index SPX -0.52% lost 8.77 points, or 0.5%, to 1,685.39, with consumer discretionary the worst performing and technology faring the best among its 10 major sectors.
Apple Inc. AAPL -0.26% rose 1.8%, extending a rally that took place Tuesday after investor Carl Icahn tweeted about holding a large position in the consumer technology company.
Shares of Macy’s Inc. M -4.47% fell 4.5% after the department-store operator cut its full-year outlook on disappointing sales.The less-than-hoped results from Macy’s raise “some questions regarding the health of the American consumer in a sluggish economy,” Fred Dickson, chief investment strategist at Davidson Companies, wrote in emailed research.
Wall Street will be looking to Wal-Mart Stores Inc. WMT -0.60% for “further confirmation on the state of the consumer when the largest U.S. retailer reports quarterly earnings tomorrow morning,” Dickson added.
Steinway Musical Instruments Inc. LVB +7.89% climbed 7.9% to $41.29 a share after it agreed to be taken private for about $512 million, or $40 a share, by Paulson & Co.
The Nasdaq Composite COMP -0.41% dropped 15.17 points, or 0.4%, to 3,669.27.
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For every share rising, just over two fell on the New York Stock Exchange, where 621 million shares traded. Composite volume neared 2.9 billion.
Benchmark indexes fell to session lows after St. Louis Federal Reserve President James Bullard expressed concern about low inflation readings, according to Dow Jones Newswires. Stocks then trimmed their decline as Bullard delivered a separate speech.
Ahead of Wednesday’s open, stock futures offered no perceptible reaction to a report from the Labor Department that had U.S. wholesale prices holding steady in July after a 0.8% gain in June. The core producer price index, which strips out energy and food, rose 0.1%, less than a 0.2% increase anticipated by analysts.
Gold futures GCZ3 +1.10% rose $12.90, or 1%, to $1,333.40 an ounce and crude futures CLU3 +0.16% added 2 cents to $106.85 a barrel.
The dollar DXY -0.04% edged lower against the currencies of major U.S. trading partners, including the euro EURUSD -0.01% and the yen USDJPY -0.04% .
Kate Gibson is a reporter for MarketWatch, based in New York.
Wall Street at Close Report by CNBC August 14, 2013: Stocks slump on Fed uncertainty; Apple jumps 2%
Stocks slump on Fed uncertainty; Apple jumps 2%
|DJIA||Dow Jones Industrial Average||15337.66||-113.35||-0.73%|
|S&P 500||S&P 500 Index||1685.39||-8.77||-0.52%|
|NASDAQ||Nasdaq Composite Index||3669.27||-15.17||-0.41%|
Stocks slumped on Wednesday as the market continued to gauge when the Federal Reserve might start to reduce its $85 billion in monthly bond purchases. Apple was a standout as some big investors took stakes in the smartphone maker.
The Dow Jones Industrial Average was firmly lower on the day, pressured by losses in Home Depot and Johnson & Johnson. Bank of America was the top gainer on the Dow 30.
The S&P 500 and the Nasdaq both closed with moderate losses.
In company news, Apple shares gained nearly 2 percent, a day after activist investor Carl Icahn revealed he had taken a large stake in the company. The stock pushed above $500 intraday but was unable to close above that mark.
Leon Cooperman's Omega Advisors also took a small 31,000 share stake in the company last quarter, according to its latest SEC filing. Cooperman told CNBC's Scott Wapner that he got back into the iPhone maker in the low $400s and that he agrees with Carl Icahn that Apple is cheap. Cooperman still thinks the best play in the space is Qualcomm, however.
Apple stock is up about 10 percent over the past three days, its strongest three-day winning streak since May 2010.
On the downside, Macy's whiffed on earnings, posting a profit of 72 cents a share that missed estimates by 6 percent. Guidance also was weak, sending shares tumbling and dragging down the broader consumer discretionary sector.
"To see Macy's miss by a wide margin is troublesome, speaking volumes about the health, or lack thereof of Middle America," said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors.
In other earnings reports, Deere reported strong earnings of $2.56 a share, easily beating Wall Street expectations, but investors are concerned the farm cycle has peaked.
In deal news, Steinway Musical Instruments jumped on news that Paulson & Co. will purchase the company for $40 a share.
'Incredibly bullish' on tech, trader says
There's a new dynamic in the technology sector, as well as in Apple, Joe Terranova of Virtus Investment Partners says.Fed uncertainty persists
St. Louis Fed President James Bullard said on Wednesday the central bank needs to see more data in the second half of the year before it starts to cut back on its monthly bond purchases and that if it tapers while inflation is too low it risks deflation.
Bullard's comments follow a talk by Atlanta Fed President Dennis Lockhart on Tuesday which downplayed the notion that the central bank would begin winding down its stimulus program in September.
Data Tuesday showed U.S. retail sales rose by half a percent in July, their fastest pace in seven month, keeping talk alive that the Federal Reserve may begin tapering its asset purchases following the central bank's September meeting.
Markets have greeted positive growth with mixed emotions as it serves as a further harbinger that historically easy monetary conditions are winding down.
While investors have been anticipating the Federal Reserve will begin unwinding its monthly bond purchases as soon as September, economic data indicated that inflation, at least, is of little concern.
Producer prices excluding food and energy rose just 0.1 percent in July, while including those items put the index at flat.
"We believe the Fed will begin to dial back some of the stimulus but that is not the same thing as having an inflation scare drive yields up," Stephen Wood of Russell Investments told CNBC. "One is more controlled. The other one is less controlled."
Bullard also said that inflation was running low, and that it was important for inflation to hit the Fed's 2 percent target before it starts to taper or it could risk deflation.
"Inflation has been running very low. I have been concerned about low inflation," St. Louis Fed President James Bullard told a Rotary Club luncheon in Paducah, Kentucky. There has "not been much indication, so far, that it has been ticking back up toward target," he said. But he warned inflation could become excessive in the future.
In Europe, markets closed higher after data showed the euro zone expanded by 0.3 percent in the second quarter, quarter-on-quarter, marking an end to the region's recession.
Earlier in the day, Germany and France posted forecast-beating growth for the second quarter. Germany's economy grew by 0.7 percent, as domestic public and private consumption picked up, while France leaped out of recession, posting 0.5 percent growth.
"The euro zone still has a long way to go before positive growth numbers can honestly be called recovery, but relief should stand above skepticism, at least for one day," said Carsten Brzeski, senior economist at ING.
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