The threat of collapse: Dow Jones Industrial can grow at the end of trading

Dow index falls, but is going to grow up in the end

In brief: Dow Jones Industrial approaches zero from today's trading on the U.S. stock market.

DJIA avoids collapse, but the weak last data make a pressure. Weak housing data weighed on the stock market as investors awaited word from the Federal Reserve on its latest interest-rate decision and the outlook for the U.S. economy. The Dow Jones Industrial Average, which entered Wednesday’s trading on a two-day losing streak, held steady just after the open but recently turned lower, trading down 22 points, or 0.2%, to 10271, hurt by declines of more than 1% each in Caterpillar, Cisco, DuPont, Intel, General Electric, Chevron and Microsoft.

The market’s losses piled up after new Commerce Department data showed that new-home sales hit a record low in May, down nearly 33% from April to a seasonally adjusted annual rate of 300,000 homes, as buyers faced a lackluster job market without a housing tax credit. Economists expected 20.6% drop to 400,000. The total was the lowest since the government began compiling this data in 1963 and comes on the heels of a big drop in existing-home sales reported Tuesday. Traders are also awaiting word from the Fed. Participants widely expect officials to keep their key rate target near zero, but there has been some trepidation lately about the pace of recovery in the U.S. and other major economies and whether the Fed will change its outlook. The policy statement, due at 2:15 p.m. EDT, will be the central bank’s first opportunity to weigh in on the growth picture since a disappointing payrolls report on June 4 caused many traders to reassess their own bets that the U.S. will enjoy a steady recovery through year end. “I think the Fed will want to put the best face they can on the economy, but at the same time assure investors that they’re willing to keep their foot on the accelerator,” said Jack Ablin, chief investment officer at Harris Private Bank. “It’s a fine balance they have to hit.” Other stock indexes slipped. The Standard & Poor’s 500-stock index was recently off 0.5%. All its sectors traded lower except telecommunications, which edged up 0.4%. The Nasdaq Composite Index shed 0.6%. Among stocks in focus, Rite Aid shares surged 7.9% trade after the drugstore chain posted a narrower first-quarter loss, – reports WSJ.

CarMax’s fiscal first-quarter profit nearly quadrupled on an improvement at its financing operations as used-vehicle sales climbed. Shares were up 8.9%. Overseas, minutes from the last Bank of England meeting showed the first vote in favor of increasing rates from historically low levels of 0.5%. Seven other members voted to keep rates at 0.5%. The lone call for higher rates sparked gains for the British pound. Sterling recently traded at $1.4891, up from $1.4808. The dollar was mixed against other major rivals, strengthening versus the euro but losing ground versus the yen. Oil prices fell more than $2 to dip below $76 a barrel. Treasury prices were mixed. The two year note slipped, but the benchmark 10-year note rallied on the weak U.S. housing numbers, pushing its yield to 3.114%.

Ukrainian Globalist
2010-06-23 17:37, Economics.

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