October 31, 2014
Wall Street dips after Federal Reserve Bullard talks about rates
US stocks ended slightly lower today after the president of the Federal Reserve Bank of St. Louis said interest-rate increases should come sooner rather than later.
Six of the 10 S&P 500 sectors were in negative territory. The S&P financial index slipped 0.3 percent and ranked among those leading the market's decline.
St. Louis Fed President James Bullard, in an interview with Fox Business Network, reiterated his belief that raising rates by the end of the first quarter of 2015 would be appropriate.
He said the US jobless rate will fall below 6 percent and inflation looks likely to rise back to 2 percent later this year, putting the economy closer to normal than most realize. Bullard is a non-voting member of the Federal Open Markets Committee, the Fed's policy-making panel.
The Fed had hinted after its meeting this month about a slightly faster pace of interest-rate increases starting next year, but suggested rates in the long run would be lower than it had indicated previously.
US-listed shares of Barclays dropped 7.4 percent to $14.55 after New York State's attorney general filed a securities fraud lawsuit against Barclays, accusing the British bank of giving an unfair edge in the United States to high-frequency trading clients.
The Barclays fallout hit other European banks. US-listed shares of UBS AG slid 2.4 percent to $18.47. Credit Suisse fell 3.6 percent to $28.29.
The Dow Jones industrial average fell 21.38 points or 0.13 percent, to end at 16,846.13. The S&P 500 slipped 2.31 points or 0.12 percent, to 1,957.22. The Nasdaq Composite dipped 0.71 of a point or 0.02 percent, to 4,379.05.
The CBOE Volatility Index, Wall Street's fear barometer, edged up just 0.4 percent to 11.63, or about half of its historical average.
Meanwhile, European shares came under pressure today after a top Federal Reserve official suggested the US economy would be ready for an interest rate hike in early 2015.
The pan-European FTSEurofirst 300 fell as much as 0.7 percent after the comments. It recovered some of its poise, to close down 0.1 percent at 1,370.38 points, retreating from a 6-1/2 year high hit last week.
London Stock Exchange surged 6.1 percent after the bourse operator unveiled a bid to acquire investment services firm Frank Russell for $2.7 billion. It said it would launch a rights issue to raise $1.6 billion to help fund the acquisition.
In commodities, the spot price of gold fell 0.3 percent to $1,315.09 an ounce.
In oil, Brent crude was down 0.7 percent at $113.27 a barrel while US crude ended 0.8 percent lower at $105.70 after a bearish turn in the latest US economic data and easing concerns of a supply disruption from the conflict in Iraq.