- POSTED: 12 Dec 2013 06:18
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US stocks tumbled Wednesday in a decline that analysts attributed to profit-taking after the equity market surge of 2013.
NEW YORK: US stocks tumbled Wednesday in a decline that analysts attributed to profit-taking after the equity market surge of 2013.
The Dow Jones Industrial Average fell 129.60 (0.81 per cent) to 15,843,53.
The broad-based S&P 500 declined 20.40 (1.13 per cent) to 1,782.22, while the tech-rich Nasdaq Composite Index gave up 56.68 (1.40 per cent) at 4,003.81.
"The market has been in a little bit of a sell-off mood since the beginning of the month, and rightly so after being up 25 per cent," said Mace Blicksilver, director of Marblehead Asset Management, referring to the S&P 500's gain so far in 2013.
"It's getting close to the end of the year," said Michael James, managing director of equity trading at Wedbush Securities. "There's more profit to protect this year."
The losses came after US lawmakers unveiled a federal budget deal for the next two years that would avert another government shutdown in January. The deal still needs to win approval from the full House of Representatives and Senate.
Retailer Costco Wholesale dipped 1.2 per cent after posting earnings of 96 cents per share, six cents shy of expectations. Revenues also lagged expectations.
Banking stocks fell one day after federal regulators approved the Volcker Rule, tight controls on proprietary trading that has been an important source of profits for many banks.
Goldman Sachs lost 1.3 per cent, Morgan Stanley dropped 2.1 per cent and Citigroup fell 2.0 per cent.
Dow component Home Depot advanced 0.5 per cent after saying it expects to achieve its long-term profit targets one year ahead of schedule thanks to strong sales. The company projects sales growth of 5.0 per cent in 2014.
Credit-card company MasterCard jumped 3.5 per cent after announcing a stock split, an 83 per cent dividend increase and up to US$3.5 billion in new share repurchases. Rival Visa increased 3.1 per cent.
The newly merged American Airlines Group continued its upward climb two days after debuting on the Nasdaq, rising 4.5 per cent. Deutsche Bank this week rated the stock a "buy" on the basis of expected merger cost savings and the improving outlook for US airlines.
Bond prices fell. The yield on the 10-year US Treasury rose to 2.84 per cent from 2.80 per cent, while the 30-year increased to 3.88 per cent from 3.83 per cent. Bond prices and yields move inversely.