clear
Friday May 22nd, 2015 6:08AM

Stocks drop for a fourth straight day

By The Associated Press
NEW YORK - U.S. stocks dropped for a fourth day in a row Monday as investors continued to express worry about the recent rise in bond yields. Banking stocks also dragged down the broader market.

The Dow Jones industrial average dropped 70.73 points, or 0.47 percent, to 15,010.74. The Standard & Poor's 500 index lost 9.78 points, or 0.6 percent, to 1,646.05. The market fell broadly; 4 stocks fell for every one that rose on the New York Stock Exchange.

The technology-heavy Nasdaq composite index also fell, losing 13.69 points, or 0.48 percent, to 3,589.09. The Russell 2000 index, which is made up of primarily riskier, small-company stocks, fell nearly twice as much as the S&P 500. That index fell 11.05 points, or 1 percent, to 1,013.25.

Investors had little data to digest Monday, so the focus for many remained the ongoing climb in bond yields. The yield on the benchmark 10-year Treasury note rose to 2.88 percent from 2.83 percent Friday. Yields are at their highest level since July 2011.

The 10-year yield has been rising sharply from a recent low of 1.63 percent reached in early May as the economy has improved and as investors anticipate an end to the Federal Reserve's huge bond-buying program as early as next month. The program has been keeping interest rates low to encourage borrowing and hiring.

"We've been in this artificially low interest rate environment for so long, it's hard to figure out what `normal' is," said Jim Dunigan, chief investment officer with PNC Wealth Management.

The quick rise in bond yields has worried some investors because it leads to higher interest rates on many kinds of loans, including home mortgages and corporate loans.

"I do think we're not too far away from that point in time where this heavy increase in bond yields is going to start impacting the (stock) markets," said Doug Peebles, chief investment officer of AllianceBernstein Fixed Income.

Homebuilders were hit hard on Monday as traders worried that higher mortgage rates could upset a recovery in the housing market. Lennar, PulteGroup and D.R. Horton all fell roughly 4 percent.

Some investors expect the 10-year note could rise above the psychologically important 3 percent mark as early as month's end.

Monday's losses come after the Dow posted its worst week of 2013. The benchmark index fell 2.2 percent last week and the S&P 500 lost 2.1 percent. The Dow and the S&P 500 have not had a four-day losing streak since December 2012.

Bank stocks moved lower after a report from the Federal Reserve appeared to indicate that large bank holding companies -- firms such as JPMorgan Chase & Co., Citigroup, Bank of America and others -- could need to raise additional capital.

In the report, the central bank said large banks had made "substantial improvements" in how they plan for future potential financial crises; however the Fed also said there was "considerable room for advancement."

JPMorgan fell $1.46, or 2.7 percent, to $51.83 while Bank of America fell 27 cents, or 1.9 percent, to $14.15. Morgan Stanley fell 66 cents, or 2.5 percent, to $25.81.

Banks have faced intense regulatory pressure to increase their capital ratios -- the amount of money they hold in reserve -- since the financial crisis five years ago. Several banks that failed, including Washington Mutual, Lehman Brothers and Bear Stearns, were criticized for not holding enough capital to protect their balance sheets from the losses stemming from bad mortgages.

Investors should expect more focus on the Fed this week. On Wednesday the Federal Reserve will publish the minutes of its July policy meeting, and on Thursday the Fed starts its annual conference in Jackson Hole, Wyo.

The Fed minutes will be the most important item for investors this week, said Kristina Hooper, head of investment and client strategies for the U.S. at Allianz Global Investors.

"It will give us insight into what the Fed is looking at to decide," Hooper said. "I don't think the Fed has made up its mind on what it's going to do in September yet."

A sell-off in retailers continued Monday. Saks, the luxury retailer, reported a wider loss two weeks after agreeing to be bought by the Canadian retailer Hudson's Bay, the parent company of Lord & Taylor, for $2.4 billion.

The retail sector got off to a dismal start last week after Wal-Mart, Macy's and Nordstrom cut their sales outlooks for the year. This week, J.C. Penney, Target, the Gap, Home Depot, Sears and others report quarterly earnings. The retail industry is often closely watched by investors because consumer spending makes up a large chunk of the U.S. economy.

Gap fell 53 cents, or 1.2 percent, to $42.59. Staples lost 43 cents, or 2.55 percent, to $16.41.

One bright spot in Monday's sea of red were technology stocks. Intel was biggest gainer in the 30-member Dow after getting an upgrade from PiperJaffray. The investment bank predicted strong sales for chips used in tablet computers and mobile devices. Intel rose 37 cents, or 1.7 percent, to $22.28.

Other major tech stocks also rose. Apple rose $5.41, or 1.1 percent, to $507.70 and Google rose $8.74, or 1 percent, to $865.60.

Among other stocks making big moves:

- Zillow said it was buying New York-focused real estate website StreetEasy for $50 million. Zillow dropped $6.48, or 7.1 percent, to $84.74.

- Dollar General rose $1.62, or 3.1 percent, to $54.09, the biggest gain in the S&P 500. Analysts at JPMorgan Chase upgraded the stock to "overweight" from "neutral" and raised their price target to $64 from $51, citing signs that sales and profit margins were improving.
  • Associated Categories: U.S. News, Business News
© Copyright 2015 AccessNorthGa.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 1 year ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 1 year ago )
Kerry seeks framework for Mideast peace talks
A senior State Department official says Secretary of State John Kerry will try this week to get Israel and the Palestinians to agree on a framework for negotiating a final peace agreement, yet cautions against raising expectations for Kerry's latest round of shuttle diplomacy.
1:35PM ( 1 year ago )
U.S. News
Missing Ga. bank director arrested in Brunswick
A bank director accused of losing millions of investors' dollars before vanishing last year was arrested Tuesday during a traffic stop in a city in south Georgia.
7:00PM ( 1 year ago )
Amtrak to suspend some Crescent service in Jan., Feb.
Amtrak service will shut down in parts of the Southeast for several days in January and February for rail maintenance by Norfolk Southern Railway.
9:00AM ( 1 year ago )
Lung cancer scans urged for some smokers, not all
Certain current or former heavy smokers should start getting yearly scans for lung cancer to cut their risk of death from the nation's top cancer killer, government advisers said Monday - even as they stressed that the tests aren't for everyone.
7:26AM ( 1 year ago )
Business News
Obama again avoids calling 1915 Armenian killings 'genocide'
WASHINGTON (AP) — President Barack Obama will once again stop short of calling the 1915 massacre of Armenians a genocide, prompting anger and disappointment from those who have been pushing him to ful...
1:00PM ( 4 weeks ago )
Ex-NFL star Hernandez convicted of murder, sentenced to life
FALL RIVER, Mass. (AP) — Former New England Patriots star Aaron Hernandez was convicted of first-degree murder and sentenced to life in prison Wednesday for a deadly late-night shooting, sealing the d...
8:54PM ( 1 month ago )
Clinton kicks off 2016 campaign online, heads next to Iowa
WASHINGTON (AP) — Hillary Rodham Clinton jumped back into presidential politics on Sunday, making a much-awaited announcement she will again seek the White House with a promise to serve as the "champi...
7:56PM ( 1 month ago )
Hall, White, Jefferson schools recognized nationally for use of technology
Three school districts in northeast Georgia - Hall, White, and Jefferson - have received national recognition for their use use of innovative technologies. They earned top spots in the Center for Digital Education's and the National School Boards Association's 10th annual Digital School Districts Survey.
By Staff
1:00PM ( 1 month ago )
US Capitol lockdown lifted after man fatally shoots himself
WASHINGTON (AP) — A precautionary lockdown of the U.S. Capitol was lifted after about two hours Saturday following a suicide by a man carrying a protest sign.The man died after shooting himself on the...
6:15PM ( 1 month ago )