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Tuesday, August 4, 2015

Wall Street moves lower on Apple, interest rate worries

Wall Street ended lower today for a third straight session as investors worried about a rise in interest rates while Apple's shares hit their lowest in over six months.

The iPhone maker's shares fell 3.21 percent to $114.64, firmly below their 200-day daily moving average, a key technical level closely watched by traders. The stock was the biggest drag on the three major US indexes.

A slowdown in China and skepticism over demand for iPhones were contributing to pressure on Apple's shares, traders said.

Stocks extended losses after Atlanta Federal Reserve President Dennis Lockhart told the Wall Street Journal that September may be the right time for Fed to lift interest rates.

The Dow Jones industrial average fell 0.27 percent to end at 17,550.69 and the S&P 500 lost 0.22 percent to 2,093.32. The Nasdaq Composite dropped 0.19 percent finish at 5,105.55.

Eight of the 10 major S&P sectors fell, with the utilities index's 1.64 percent decline leading the losers.

The Fed has said it needs to see a sustained economic recovery before it raises interest rates for the first time in nearly a decade.

Soft economic data had prompted some investors to argue that the Fed might hold off on raising rates until December. After the Fed meeting last week, investors expected a rate increase in September.

European stock markets lost ground, with French bank Credit Agricole among the worst performers after reporting results, and energy stocks hit by weak oil prices.

The pan-European FTSEurofirst 300 index was down 0.2 percent at 1,580.93 at the close, while the euro zone's blue-chip Euro STOXX 50 index was down 0.4 percent.

Athens' stock market, which slumped 16 percent on Monday after a five-week shutdown, fell a further 1.2 percent. Greece has had to introduce capital controls and is seeking a new bailout deal following a debt crisis.

Many investors have cut their exposure to Greece, which accounts for only a fraction of the overall European economy, and are focusing more on "core" European markets such as Germany and France, or Spain and Italy in the south.

In France, Credit Agricole fell 10.2 percent after the bank ruled out any near-term simplification of its structure because of "constraints" encountered during talks with the European Central Bank (ECB).

Germany's BMW dropped 1.3 percent after its second-quarter operating profit eased back on slowing China sales, leading BMW to warn that, while it still expects records for sales and pretax profit in the full year, earnings momentum was slowing.

Meanwhile, Japan's Nikkei share average edged down on weakness in manufacturing activity in China and the United States, prompting investors to rotate out of cyclicals to defensive stocks such as drugmakers.

Suppliers to Apple Inc tumbled as the tech giant's shares hit six-month lows, continuing a downward trend in place since its earnings two weeks ago. TDK Corp fell 5.9 percent while Taiyo Yuden fell 3.6 percent.

The benchmark average fell as much as 0.5 percent and closed at 20,520.36, down 0.1 percent. The broader Topix was flat at 1,659.83.

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Tags:  US  stock market  Europe  Nikkei  





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