Wall Street Drops from Records in the Wake of Rate Speculation


 Wall Street Drops from Records in the Wake of Rate Speculation

US shares dropped from records, pulled down by losses among small firms, as investors assessed stock valuations and anticipated the Federal Reserve might hike interest rates sooner than projected.

GT Advanced Technologies Inc. dropped 11% after its stock was downgraded by CanaccordGenuity Group Inc. to hold from buy. Expedia Inc. retreated 1.9% after reaching a deal to acquire assets worth $658 million. King Digital Entertainment Plc soared 3.6% as investors were advised by Piper Jaffray Cos. To buy shares of the maker of the Candy Crush Saga video game.

The Standard & Poor’s 500 Index plunged 0.4% to 1,976.64 as of 11:40 in New York. The Dow Jones Industrial Average lost 63.70 points or 0.4% to 17,004.56. The Russell 2000 Index of small firms reversed 1.4%, the most decline since May. The volume of shares that changed hands in the S&P 500 was 7.8% lower than the average for the past 30 days after US equities’ trading was paused on July 7 for the Independence Day holiday.

“There’s a little profit-taking from hitting those record highs. The market’s not retracing sharply, just falling off modestly. We’re in a lighter trading environment and we could continue to grind higher,” Stephen Carl of Williams Capital Group LP in New York told Bloomberg.


Stocks in both the S&P 500 and the Dow surged 1.3% last week. The 30-stock index closed higher than 17,000 for the first time, with the monthly employment creation surpassing 200,000 for a fifth month in June.

Goldman Sachs Group Inc. brought closer its projection for the time when the Federal Reserve will hike interest rates. Firms such as JPMorgan Chase & Co. and Bank of Tokyo-Mitsubishi UFJ Ltd already moved up their estimates after payrolls data last week.

According to the Wall Street Journal, American Apparel added 3.4% on reports that the clothing firm is in discussions to raise financing.

To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com