US stocks fell this afternoon, after the S&P 500 Index yesterday halted a four-day streak of record closes, and after the World Bank cut its forecast for global growth and investors weighed equity valuations.
By Paolo Palazzi-Xirinachs
Thursday, June 12, 2014
Trader’s seem uneasy with a market that’s trading near all-time highs with low growth prospects. As of 2:00 PM in new York, the S&P 500 fell 0.5% to 1,940.77, while the Dow dropped 18.71 points, or 0.7%, to 16,827.21, poised to end a five-day rally.
The big national news today was US House Majority Leader Eric Cantor’s defeat last night in the Virginia GOP primaries that could also have long-range market repercussions, as the seven-term House veteran was an ally for Wall Street on issues ranging from the 2008 Troubled Asset Relief Program to defending the Export-Import Bank. Since Republicans took control of the House in 2011, debates over the debt limit -- the total amount of money the US government can borrow to finance existing obligations such as Social Security and Medicare -- led to eleventh-hour showdowns that raised concerns that the government could default on its obligations, roiling financial markets. Congress voted in February to suspend the limit until March 15, 2015. The defeat makes compromise on issues such as immigration reform, debt ceiling and the budget.
In other market news today, nine of the 10 main S&P 500 groups retreated, with industrial and financial stocks losing at least 0.7% to pace declines. Boeing slid 2.4% to $134.01 for the biggest drop in the Dow. The plane maker is the ’’biggest loser’’ other than Cantor in last night’s primary, as the defeat imperils financing for the Export-Import Bank. Boeing said last month the lender would support $10 billion in sales this year. Bank of America sank 1.8% to $15.65. The US Justice Department is seeking about $17 billion from Bank of America Corp. to settle probes into its handling of mortgages ahead of the financial crisis, the New York Times reported in today’s issue. Hilton Worldwide Holdings Inc. slid 2.9% to $22.76 after registering to sell 90 million shares held by Blackstone Group LP. Blackstone is taking advantage of stocks at record highs to start to return money from its largest-ever investment by the amount of equity staked. The world’s largest lodging company by market value has climbed 17% since raising $2.35 billion in its Dec. 11 initial public offering.
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