US stocks have closed lower, continuing their trend downward on mediocre economic news and higher bond yields.
The Dow Jones Industrial Average dropped 70.73 (0.47 per cent) to 15,010.74 on Monday.
The broad-based S&P 500 lost 9.77 (0.59 per cent) at 1,646.06, while the tech-rich Nasdaq Composite Index gave up 13.69 (0.38 per cent) at 3,589.09.
US stocks have fallen for two straight weeks on uninspiring economic data, disappointing retail earnings and higher bond yields due to the expectation that the Federal Reserve will soon taper its bond-buying program.
There has been “nothing to really spur peoples’ mindsets from when they left Friday”, said Michael James, managing director of equity trading at Wedbush Securities, adding that light trading volumes accentuate movements.
“We had our worst week of the year last week and I think that sentiment is continuing into today with no real news or individual corporate actions.”
James said key data later this week from the US, China and the eurozone could spur a shift in the market’s thinking, as could new insights from the Federal Reserve meeting minutes Wednesday and the annual Fed gathering at the end of the week in Wyoming.
Large banks were among the biggest losers after a Federal Reserve report said the companies need to improve their capital planning processes, including better accounting for financial risks.
Bank of America fell 1.9 per cent, Citigroup lost 2.0 per cent and JPMorgan Chase sank 2.7 per cent. JPMorgan also faces a federal investigation into its hiring practices in China, its latest in a series of regulatory woes.
Apple rose 1.1 per cent following a report that it had asked its Taiwan-based supplier to begin shipping two new versions of the iPhone next month, including a lower-cost model. Apple declined comment.
Dow component Intel gained 1.7 per cent after being upgraded by Piper Jaffray, which suggested the shares were oversold on unwarranted fears that the market for personal computers was going to disappear.
Independent oil company Apache declined 4.6 per cent amid concerns the company’s financial performance could be hindered by its leverage to violence-plagued Egypt.
Bond prices continued to fall. The yield on the 10-year US bond rose to 2.88 per cent from 2.83 per cent on Friday, while the 30-year increased to 3.90 per cent from 3.86 per cent. Bond prices and yields move inversely.
