US stocks sink on China concerns
A trader works in a booth on the floor of the New York Stock Exchange Monday, June 24, 2013. Traders in the US dumped stocks, bonds and commodities, prompted by signs of distress in China’s economy and worries about the end of the Federal Reserve bank’s easy money policies. AP/RICHARD DREW
NEW YORK—US stocks Monday ended the day decisively lower on concerns about the Chinese economy but rallied well above their intraday lows as US Treasury yields retreated.
The Dow Jones Industrial Average sank 139.84 (0.94 percent) to 14,659.56.
The broad-based S&P 500 tumbled 19.34 (1.21 percent) to 1,573.09, while the tech-rich Nasdaq Composite Index gave up 36.49 (1.09 percent) at 3,320.76
Stocks opened firmly lower amid concerns about the Chinese economy. But the indices all came back from their intraday losses, with the Dow finishing more than 100 points above its low.
The yield on the 10-year US Treasury stood at 2.55 percent late Monday afternoon after reaching as high as 2.66 percent earlier.
Peter Cardillo of Rockwell Global Capital also cited comments from some US Federal Reserve officials that emphasized the Fed would not scale back its accommodative policy immediately.
“We’re probably getting to the end of this overreaction” to the Fed’s comments last week, Cardillo said.
Most of the companies in the Dow declined. The biggest drops were seen by industrials like Alcoa (down 2.4 percent) and Boeing (down 2.1 percent), while Bank of America shed 3.1 percent and JPMorgan Chase lost 2.0 percent.
Shares of Apple dived 2.7 percent to $402.34 after sinking below $400 earlier in the session on concerns the company’s products are losing appeal with consumers.
A research note from the brokerage firm Jefferies said Apple was likely to cut production plans for the iPhone to between 25 and 30 million in the third quarter, down from between 40 to 45 million.
Tenet Healthcare rose 4.5 percent after announcing it would acquire Vanguard Health Systems for $4.3 billion, including $2.5 billion in Vanguard debt. Vanguard soared 67.3 percent to $20.70. The deal values Vanguard at $21 per share.
Pharmaceutical company Allergan plummeted 11.6 percent after Deutsche Bank slashed its rating on the company to “hold”, citing guidance from the Food and Drug Administration that suggested the popular Restasis eye medication may soon face competition from generics.
Metals producer Freeport-McMoRan Copper & Gold fell 4.8 percent after concerns about the slowing Chinese economy prompted a decline in prices of copper and other metals.
Bond prices were mixed. The yield on the 10-year US Treasury rose to 2.55 percent from 2.51 percent Friday, while the 30-year slipped to 3.56 percent from 3.57 percent. Bond prices move inversely to yields.
