While you were sleeping: Wall St drifts from record highs
By Margreet Dietz
Oct. 10 (BusinessDesk) - Wall Street drifted lower, after both the Dow and the Nasdaq touched record highs earlier in the day, as investors eyed a fresh round of US bank earnings due later this week as well as the Federal Reserve minutes from its most recent meeting.
In 2.31pm trading in New York, the Dow inched 0.06 percent lower, as did the Nasdaq Composite Index. In 2.17pm trading, the Standard & Poor’s 500 Index slipped 0.09 percent.
Earlier in the day, the Dow crept to a record 22,803.37, while the Nasdaq touched a record 6,599.34.
“The relatively high valuation, where the market is trading 17 to 18 times earnings, is merited by a very low interest rate environment,” Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, told Reuters. “We are not [in] danger yet if you keep your eye on rates.”
US Treasury markets were closed for the Columbus Day holiday.
“The overall move has been slow but certainly steady, and the real move has come in the bond market,” Matt Maley, an equity strategist at Miller Tabak & Co, wrote in note Monday, Bloomberg reported. “Since the bond market is closed for Columbus Day, it would seem to us that today will be a very quiet one in the stock market.”
Minutes from last month’s Federal Open Market Committee meeting are scheduled for release on Wednesday, and will be closely eyed for any further indications about the outlook for inflation and interest rates as bets for a December hike have firmed.
The Dow moved lower as declines in shares of General Electric and those of Nike, recently down 3.7 percent and 1.6 percent respectively, outweighed gains in shares of Wal-Mart Stores and those of IBM, recently up 2.7 percent and 0.8 percent respectively.
General Electric said it appointed activist shareholder Trian Fund Management chief investment officer Ed Garden to its board. The stock has slid this year and is trading near its lowest level in about two years.
“Like other GE shareholders, I am disappointed by the recent performance of GE’s stock,” Garden said in a statement. “But I continue to believe that GE represents an attractive long-term investment opportunity with significant upside. We will remain focused on enhancing long-term value for GE shareholders.”
In Europe, the Stoxx 600 Index ended the day with a 0.2 percent increase from the previous close. France’s CAC 40 Index added 0.1 percent, while Germany’s DAX Index rose 0.2 percent.
In an upbeat note about Europe’s largest economy, Germany’s output, adjusted for seasonal swings and inflation, increased 2.6 percent in August from July when it fell a revised 0.1 percent. That’s the biggest increase since July 2011, according to Bloomberg.
The UK’s FTSE 100 Index fell 0.2 percent.