Wall Street opens on a down note

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREWhicker: Clemson demonstrates that it’s tough to knock out the champRising inflation is also a problem for consumers, whom retailers rely on during the holidays to fuel their profits. With only a week left until Christmas, sales data has suggested tepid spending by Americans, who are struggling with higher food and energy costs and tumbling home values. The Dow Jones industrial average fell 72.02, or 0.54 percent, to 13,267.83. Broader stock indicators also declined. The Standard & Poor’s 500 index dropped 9.19, or 0.63 percent, to 1,458.76, and the Nasdaq composite index fell 16.40, or 0.62 percent, to 2,619.34. Last week, the Dow dropped 2.10 percent, the S&P 500 index fell 2.44 percent and the Nasdaq lost 2.60 percent. Government bond prices rose as stocks fell. The yield on the 10-year Treasury note, which moves opposite its price, slipped to 4.19 percent from 4.24 percent late Friday. The dollar rose against most other major currencies Monday, while gold prices fell. Light, sweet crude futures fell $1.07 to $90.20 a barrel on the New York Mercantile Exchange. In economic data, the U.S. government said the current account deficit, the broadest measure of international trade, narrowed in the third quarter compared to the second quarter, as expected, to the lowest level in two years. Meanwhile, the New York Fed’s Empire State Manufacturing Index fell much more sharply in December than economists anticipated. Later on Monday the National Association of Home Builders is scheduled to release its housing market index, which is expected to hold steady. Wall Street, which started 2007 soaring due to strong merger-and-acquisition activity, found little consolation in deal-making Monday. Ingersoll-Rand Co. – the manufacturer that makes, among many things, Thermo King refrigerated trucks – said it will buy Trane Inc. for $10.1 billion to access its building and transportation cooling systems. The deal will create one of the world’s largest makers of air conditioners. Ingersoll-Rand shares fell $3.36, or 6.8 percent, to $45.82, Trane surged $8.65, or 23 percent, to $45.85. Meanwhile, Aon Corp. announced it will sell two insurance units for $2.75 billion in separate cash deals, and the conglomerate Loews Corp. said Monday its board approved a spinoff of Lorillard Inc., one of the nation’s largest cigarette makers. Loews rose $1.77, or 3.8 percent, to $48.57. Aon rose 52 cents to $49.46. Overseas, Japan’s Nikkei stock average fell 1.71 percent, and Hong Kong’s Hang Seng index fell 3.51 percent. Britain’s FTSE 100 dropped 1.37 percent, Germany’s DAX index lost 1.30 percent and France’s CAC-40 declined 1.26 percent. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! NEW YORK – Wall Street extended last week’s losses Monday as investors remained skeptical that the Federal Reserve’s first credit auction will be effective in loosening up a tight market. The Fed is offering $20 billion in 28-day credit through an auction Monday. The aim of the auction is to encourage commercial banks to borrow from the central bank, and in turn, boost banks’ lending to businesses and consumers. Last week, the Fed disappointed investors when it cut interest rates by only a quarter-point, which was less than some analysts expected. Wall Street is pleased that policy makers say they are continuing to try to lift market confidence, which has dwindled since home foreclosures started soaring, but the market is so far unconvinced that the auction will work. A speech Sunday night by former Fed Chairman Alan Greenspan added to the market’s ill humor. Greenspan said “stagflation” – simultaneous inflation and economic slowdown – is a growing possibility, given last week’s data showing spiking consumer prices. With inflation on the rise, the Fed, which has reduced the target federal funds rate three times since the summer to calm the markets and stoke the economy, may feel less inclined to lower rates again. last_img

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