While you were sleeping: Stocks, bonds drop
Sept. 10 (BusinessDesk) - Wall Street and US Treasuries fell amid concern the US Federal Reserve might raise interest rates sooner than anticipated.
Fed policy makers are set to begin their next two-day meeting on September 16 amid consistent evidence of the accelerating pace of growth in the world’s largest economy.
“Evidence based on surveys, market expectations, and model estimates show that the public seems to expect a more accommodative policy than Federal Open Market Committee participants,” Jens Christensen, a senior economist, and Simon Kwan, vice president of financial research, said in a San Francisco Fed report on Monday.
“The public may also be less uncertain about these forecasts than policymakers,” they said.
In late afternoon trading in New York, the Dow Jones Industrial Average slid 0.60 percent, the Standard & Poor’s 500 Index declined 0.68 percent and the Nasdaq Composite Index shed 0.82 percent.
Shares of Apple fell, last down 2 percent at US$96.40, reversing gains from earlier in the day when the stock climbed as high as US$103.08. Apple revealed the new iPhone 6 models with larger screens and Apple Watch, a new product line of watches. It is a big vote of confidence for Apple CEO Tim Cook.
“They’re on top of the world,” Tim Bajarin, an analyst at Creative Strategies, told Bloomberg News “The No. 1 difference between last year and this year is the fact that Wall Street and even the customers have embraced the fact that this is Tim’s company -- he’s proven that he not only can pick up the mantle of Steve Jobs but advance it.”
Apple also introduced Apple Pay, a new mobile payments service.
Slides in shares of McDonald’s and those of Home Depot, down 1.6 percent and 2.2 percent respectively, led the Dow lower.
Shares of Home Depot fell a day after the company confirmed there was a breach of its payment security systems that may have affected customers at stores in the US and Canada.
Shares of McDonald’s dropped after the company said sales at stores open at least 13 months fell 3.7 percent in August, while US comparable sales declined 2.7 percent, sliding for the fourth month in a row.
"During August, McDonald's global business faced several headwinds that impacted sales performance," said McDonald's Chief ExecutiveOfficer Don Thompson in a statement. “We are diligently working to effectively navigate the current market conditions to regain momentum.”
In Europe, the Stoxx 600 finished the day with a 0.4 percent decline from the previous close. The UK’s FTSE 100 Index slipped 0.1 percent, while Germany’s DAX and France’s CAC 40 both shed 0.5 percent.
In a speech, Bank of England Governor Mark Carney made clear he doesn’t see a currency union with an independent Scotland. He also flagged that the central bank will probably start to increase interest rates in the first half of 2015.