Wall St. indexes drop 1 percent as rate hike looms

The S & P 500 index suffered its worst loss in six weeks on Monday as Wall Street braced for an interest-rate hike and fretted about weak Chinese trade data.

Nine of the 10 major S & P sectors ended lower, led by consumer discretionary and energy stocks. The Dow Jones industrial average slipped back into negative territory for the year, with only two of its 30 components higher on the day.

US companies face the prospect of higher borrowing costs if the Federal Reserve raises interest rates next month, as is widely expected after Friday' s strong jobs report.

" There are short-term myopic concerns about a Fed rate hike," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa.

" Bond and stock prices will decline when the Fed makes that first announcement, but ultimately, stocks will thrive because it will prove the US economy is healthy enough to stand on its own," Dollarhide said.

Investors also focused on renewed fears of a slowdown in China, a key market for many companies, ahead of the crucial holiday shopping season.

China, one of the United States' top trade partners, ended October with a record high trade surplus, with both exports and imports falling.

All three major US stock indexes trimmed some of their losses late in the session.

The Dow Jones industrial average .DJI ended down 1.0 percent at 17,730.48 points and the S & P 500 .SPX lost 0.98 percent, to 2,078.58. The Nasdaq Composite .IXIC dropped 1.01 percent to 5,095.30.

The CBOE Volatility index .VIX, known Wall Street' s fear gauge, rose 15 percent to 16.52, the most in a single session in six weeks.

Following a dramatic selloff in August, fueled by fears about a slowing Chinese economy, and then a recovery in October, helped by not-so-bad corporate report cards, the S & P 500 remains up 0.99 percent for the year while the Dow is down 0.52 percent.

With 88 percent of S & P 500 companies having posted their third-quarter results, earnings appear to have dipped 0.9 percent compared to the year before, better than the 4.2 percent decline that analysts on average predicted at the start of October, according to Thomson Reuters data .

After the bell on Monday, Lions Gate Entertainment (LGF.N) posted second-quarter revenue below analysts' expectations and its stock dropped 12.2 percent.

Priceline (PCLN.O) slumped 9.6 percent after a weak fourth-quarter profit forecast.

The energy sector .SPNY was the worst-hit among the S & P sectors, falling 1.45 percent after a fall in oil prices.

Only two Dow components rose. Walt Disney (DIS.N) gained 0.65 percent, while DuPont (DD.N) added 1.0 percent after the chemical and seeds producer said interim Chief Executive Ed Breen would stay on.

Dean Foods (DF.N) rose 7.30 percent after reporting a better-than-expected quarterly profit.

Plum Creek Timber (PCL.N) soared 17.3 percent. Weyerhaeuser (WY.N) said it would buy the company to create a $ 23 billion timber company. Weyerhaeuser fell 2.96 percent.

NYSE declining issues outnumbered advancers 2,476 to 627. On the Nasdaq, 1,964 issues fell and 849 advanced.

The S & P 500 index showed 3 new 52-week highs and 10 lows, while the Nasdaq recorded 101 new highs and 64 lows.

 

US stocks ended little changed on Friday, with a rise in financials countered by a slide in utilities and other sectors, as Wall Street took the strong US jobs report as evidence the Federal Reserve will soon raise interest rates.

Since the Fed last week opened the door to a rate increase in December, investors have been looking to economic reports for clues to whether the central bank will take action. Data on Friday showed US non-farm payrolls growth in October was the best since December 2014, while the unemployment rate fell to 5 percent, the lowest since April 2008.

The three major indexes posted higher weekly performances for the sixth week in a row, after posting their best monthly results in four years in October.

The overall market on Friday was " holding up well," Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois, who noted that a Fed action would indicate the economy is healthy enough to tolerate higher rates.

" While higher interest rates themselves are not a good thing, a vote of confidence in the strength of the economy I think is going to overshadow that over time," Jankovskis said.

The Dow Jones industrial average .DJI rose 46.9 points, or 0.26 percent, to 17,910.33, the S & P 500 .SPX lost 0.73 points, or 0.03 percent, to 2,099.2 and the Nasdaq Composite .IXIC added 19.38 points, or 0.38 percent, to 5,147.12.

The S & P financial sector .SPSY rose 1.1 percent, leading all sectors. Banks tend to benefit from higher borrowing rates, and shares of JPMorgan (JPM.N), Bank of America (BAC.N) and Citigroup (CN) each climbed at least 3 percent, making them the biggest positive influences on the S & P.

The rate-sensitive utilities sector .SPLRCU dropped 3.6 percent, the worst performing group. The S & P consumer staples sector .SPLRCS fell 1.1 percent, while the energy group .SPNY dipped 0.4 percent as crude oil prices were down.

" The market is reacting today as if rates will be increased in December," said Ben Halliburton, chief investment officer at Tradition Capital Management in Summit, New Jersey.

" They' re rotating money to take advantage of that or cut back where they' re not going to be advantageous," Halliburton added.

Alibaba (BABA.N) fell 2.1 percent to $ 83.61 after a CNBC report said short-seller Jim Chanos pitched the company as a possible short.

Shares of Disney (DIS.N) rose 2.4 percent to $ 115.67 after it reported a higher-than-expected profit.

ZS Pharma (ZSPH.O) shares jumped 40.6 percent to $ 89.04 after Britain' s AstraZeneca (AZN.L) agreed to buy the biotech company for $ 2.7 billion.

Tableau Software (DATA.N) shares jumped 21.4 percent to $ 102.44 after higher-than-expected results, with other data analytics stocks also rising.

Declining issues outnumbered advancing ones on the NYSE by 1,931 to 1,186, for a 1.63-to-1 ratio on the downside on the Nasdaq, 1,726 issues rose and 1,086 fell for a 1.59-to-1 ratio favoring advancers.

The S & P 500 posted 15 new 52-week highs and 9 new lows the Nasdaq recorded 151 new highs and 70 new lows.