November 29, 2014
Wall St ends lower after World Bank cuts forecast
US stocks fell today, with the Dow breaking a four-day string of record closing highs, following the World Bank's reduction of its global growth forecast.
The S&P 500's drop of 0.4 percent was its biggest daily percentage loss since May 20. The benchmark index fell for the second day in a row, after four straight record closing highs.
The selloff was broad. Every S&P 500 sector index except energy declined for the day.
Low volume and low volatility have marked recent sessions, leaving indexes to trade in a narrow range.
The World Bank's lower growth forecast provided investors with a reason to unload some stocks. Late Tuesday, the World Bank cut its global economic growth forecast for 2014 to 2.8 percent from 3.2 percent because of a harsh US winter and the impact of the Ukraine crisis.
The biggest drag on the S&P 500 was Bank of America Corp , down 2.1 percent at $15.59. The bank has reached an impasse in negotiating a multibillion-dollar settlement with the US Department of Justice related to the bank's mortgage investments, according to The New York Times.
The Dow Jones industrial average fell 102.04 points or 0.60 percent, to 16,843.88. The S&P 500 slid 6.90 points or 0.35 percent, to 1,943.89. The Nasdaq Composite dropped 6.07 points or 0.14 percent, to 4,331.93.
Even as the Dow and the S&P 500 retreated from recent gains, the PHLX semiconductor index kept up its rally. The SOX rose 0.5 percent, extending its winning streak to 15 days, its longest stretch of gains since the index was created about 20 years ago.
The CBOE Volatility Index rose 5.6 percent to 11.60 but remained well below its historical average of 20. In a sign of the market's low volatility, the 14-day Average True Range on the S&P 500 fell to 9.71, the lowest since February 2013.
European equity markets retreated from multi-year highs on as a profit warning from German airline Lufthansa hit travel stocks.
Lufthansa slumped by 14.2 percent in heavy volume after the company said it would not reach its profit targets for the next two years, and the fall in its share price dragged other airlines down with it.
Air France KLM fell 7 percent, International Consolidated Airlines Group dropped by 3 percent and the regional STOXX Europe 600 Travel & Leisure Index fell 1.5 percent.
Aerospace group Airbus also weakened by 3.1 percent after Dubai's Emirates airline canceled a contract with the company.
Lufthansa's woes weighed on the broader German stock market, with the benchmark DAX index falling 0.8 percent to 9,949.81 points, retreating from a record high of 10,033.74 points reached earlier in the week.
The pan-European FTSEurofirst 300 index, which had hit its highest level in more than 6 years earlier this week, fell 0.5 percent to 1,391.59 points.
The euro zone's blue-chip Euro STOXX 50 index, which also touched 6-year highs this week, fell 0.8 percent to 3,289.09 points.
Meanwhile, Japanese shares bounced off a one-week low supported by news that Japan will retain its status as the only developed market in the region in MSCI stock indexes, checking any potential knee-jerk rotation out of Tokyo equities.
The Nikkei gained 0.5 percent to 15,069.48. The broader Topix added 0.8 percent to 1,239.07, while the new JPX-Nikkei Index 400 advanced 0.8 percent to 11,280.65.