Wednesday, March 28, 2012

US stocks close lower in bumpy trade

NEW YORK: US stocks closed lower on Tuesday amid profit-taking after Monday's strong surge and a slip in consumer confidence.

The Dow Jones Industrial Average ended down 43.90 points (0.33 percent) to 13,197.73, giving up only a bit more than a quarter of Monday's 161-point jump.

The broad-market S&P 500 dropped 3.99 points (0.28 percent) to 1,412.52, while the tech-rich Nasdaq Composite moved into the negative in the last 15 minutes to finish down 2.22 points (0.07 percent) at 3,120.35.



A dip in the Conference Board's US consumer confidence index, and the S&P-Case Shiller's report that home prices continued to fall in January, cast a slight cloud over trade.

"The drop in overall confidence was due to increased concerns that the economic recovery may slow in the coming months. That could be the result of increasing media reports that gasoline will hit 5.00 dollars per gallon during the summer," said Briefing.com

But, it added, "Consumer spending trends follow income growth and not confidence indicators. Continued improvement in the labour sector will drive up consumption regardless of how confidence trends."

Bank of America, down 3.3 percent, and Verizon, off 1.7 percent, led the losers of the Dow, while Pfizer topped gainers with a 1.5 percent climb.

Shares of home builder Lennar picked up 5.0 percent. The company as expected reported a sharp 45 percent decline in profit year on year, but said revenues were up 30 percent and orders for new homes rose 33 percent.

"New sales orders in the first quarter were encouraging. We have seen the market stabilise, driven by a combination of low home prices and low interest rates, making the decision to purchase a new home more attractive," said chief executive Stuart Miller in a statement.

On the Nasdaq, Apple, up 1.2 percent, and Amazon, up 1.3 percent, led the trading. Tuesday's gain left Amazon up nearly 13 percent since mid-March.

Adult education group Apollo dropped 8.5 percent after Credit Suisse downgraded the company from outperform to neutral, citing worries that it will not be able to expand enrolment.

US bond prices rose. The interest on the ten year Treasury fell to 2.19 percent from 2.24 percent on Monday, while the 30 year was at 3.30 percent, down from 3.33 percent.

Bond prices and yields move in opposite directions.

- AFP/de

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Source From Channel News Asia

Source From Channet News Asia

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