- City suspends liquor license for downtown Cape bar; owners say they want to fix problems (3/26/17)7
- Mall aboard: Future requires evolution at West Park Mall (3/24/17)24
- Harbor Freight Tools store coming to Cape (3/29/17)7
- Legal discrimination complaint, ethics complaint filed in Scott City government (3/22/17)13
- Cape school board rejects proposal to allow parochial-school students to play sports (3/28/17)79
- Former Southeast softball coach sues Board of Regents; seeks damages and her job back (3/23/17)15
- 'Construction with finesse' (3/26/17)2
- Chaffee district seeks bond issue for classrooms, property (3/26/17)4
- Lawmakers put prevailing wage in crosshairs; laborers object (2/12/17)10
- Triplett manslaughter case set for July 2018 (3/21/17)2
Dow falls below 11,000 as dollar rebounds
NEW YORK -- A stronger dollar and a surprise interest rate increase in China that may slow that country's economy helped push stocks lower Tuesday.
The Dow Jones industrial average fell below 11,000 for the first time in a little more than a week, reversing a streak that had pushed the index up nearly 7 percent for the year. It was the largest single-day drop in the market since early August.
Bank of America Corp.'s 4.4 percent drop was the largest fall in the Dow and came amid reports that a group of investors including BlackRock Inc. and Pacific Investment Management Co. are reportedly attempting to force the bank to repurchase mortgages put out by Countrywide Financial Corp., which Bank of America bought in 2008. BlackRock and Pimco declined to comment.
The broader stock market fell following an announcement that China, whose rapid growth has helped pull the global economy along, raised a key interest rate to fight inflation. That pushed the shares of U.S. companies down, many of which consider China an important market.
The Dow Jones industrial average fell 165.07, or 1.5 percent, to 10,978.62. Standard & Poor's 500 index fell 18.81, or 1.6 percent, to 1,165.90, while the Nasdaq composite index fell 43.71, or 1.8 percent, to 2,436.95.
After the market closed, Yahoo! Inc. announced that its total revenue for the third quarter came to $1.6 billion, up less than 2 percent from the $1.58 billion it earned at the same time last year. After accounting for a one-time gain from the sale of its help-wanted site, the company earned 16 cents per share, which was one cent more than analysts were expecting. Shares of Yahoo were up 1 percent in after-market trading.
Earlier in the day, disappointing news from Apple Inc. and IBM Corp. helped send the technology-heavy Nasdaq down about 2 percent. Both companies beat earnings forecasts when they reported results late Monday, but each delivered news that investors didn't like. Apple Inc. didn't sell as many iPads as analysts had hoped and a measure of profitability was lower than expected. IBM Corp.'s outsourcing business didn't do as well analysts predicted.
Shares of Apple fell 2.6 percent, to $309.49. Apple's shares have gained 9.1 percent this quarter.
"On average, the earnings reports have beaten expectations, but now investors are asking, 'What's next?'," said Jonathan Satovsky, the head of Satovsky Asset Management. "Even Apple reduced guidance for the fourth quarter of the year."
The dollar rose 1.7 percent against a basket of currencies, while gold fell 2 percent.
The strengthening dollar led to a broad selloff of commodities. That dragged down stocks of companies in the energy and materials sectors of the Standard and Poor's 500, which were both down more than 2 percent.
"The dollar rebounded pretty significantly today and that's one of the primary drivers of the market," said John Pandtle, who is a co-manager of the Eagle Large Cap Value fund.
For weeks, traders have been anticipating that the Federal Reserve will expand a program to buy bonds in hopes of encouraging spending. That has led many investors to buy stocks despite questions about the strength of the economic recovery.
"We're seeing a mixed bag from earnings reports and housing numbers," said Doug Roberts, the chief investment strategist for Channel Capital Research, citing a recent report that showed a slight increase in homebuilder confidence. "If the Fed wasn't sitting there following through with liquidity, then we'd be in a very different situation."
Shares of Bank of America Corp. fell 54 cents, or 4.4 percent, after the company reported a loss because of a one-time charge tied to credit and debit card reform legislation passed this year. Goldman Sachs Group, Inc., which also reported results before the bell, earned $1.74 billion, or $2.98 a share, much higher than the $2.32 per share analysts predicted. Shares rose $3.02, or 1.9 percent.
Some traders may be taking earnings announcements as an opportunity to sell and record gains. "We're seeing some profit-taking today after the tremendous September and first week of October that we've seen in the market," said Eric Marshall, the director of research at Hodges Capital.
Coca Cola Co., which reported earnings Tuesday, was one of only two stocks in the Dow with gains. The other was chipmaker Intel Corp.
Bond prices rose. The yield on the benchmark 10-year Treasury note fell to 2.48. It traded late Monday at 2.51 percent.
Consolidated trading volume on the New York Stock Exchange came to 5.5 billion shares. Five shares fell for every one that rose on the NYSE.