By Rita Nazareth - Sep 8, 2011 8:52 PM GMT+0700
Traders work at the New York Stock Exchange on Sept. 6, 2011. Photographer: Scott Eells/Bloomberg
Sept. 8 (Bloomberg) -- Bob Janjuah, the co-head of cross-asset allocation strategy at Nomura International Plc, talks about the global economy and financial markets. Janjuah, speaking in Hong Kong with Rishaad Salamat on Bloomberg Television's "On the Move Asia," also discusses Federal Reserve monetary policy and the European sovereign-debt crisis. (Source: Bloomberg)
U.S. stocks fell, following the biggest jump in two weeks for the Standard & Poor’s 500 Index, as jobless claims increased and the European Central Bank said risks to the economic recovery have intensified.
Financial and industrial shares fell the most among 10 groups in the S&P 500. General Electric Co. and Bank of America Corp. (BAC) dropped at least 0.6 percent, pacing losses in the Dow Jones Industrial Average. Dollar General Corp. (DG) slumped 4 percent after saying that holders will sell 25 million shares.
The S&P 500 retreated 0.3 percent to 1,194.94 at 9:51 a.m. in New York, paring earlier losses of as much as 0.7 percent. The gauge snapped a three-day decline yesterday. The Dow decreased 8.74 points, or 0.1 percent, to 11,406.12.
“This market is looking for assistance and what it wants is a wheelchair and someone to push it,” Burt White, who helps oversee $330 billion as chief investment officer at LPL Financial Corp. in Boston, said in a telephone interview. “People are hoping that central banks will deliver that. Everyone was expecting the ECB to be on hold and do nothing and yet they were hoping for something. The ECB was really in a tough spot because they made a pretty bad decision in raising rates. It’s a confidence issue in this market.”
The S&P 500 rose 2.9 percent yesterday, the largest gain since Aug. 23, as investors speculated that President Barack Obama’s plan to inject more than $300 billion into the economy will bolster growth. Obama plans to unveil his proposals for promoting job growth in an address to a joint session of Congress today.
’High Uncertainty’
U.S. stock futures extended losses as ECB President Jean- Claude Trichet resisted calls to lower interest rates even after “downside risks” to the euro area intensified. The economy faces “particularly high uncertainty,” Trichet said at a press conference in Frankfurt today. The ECB cut its growth forecasts for this year and next.
“The ECB is marching to its own tune,” Stephen Wood, who helps oversee about $163 billion as the New York-based chief market strategist for Russell Investments, said in a telephone interview. “The real world was expecting more from the ECB given that the ECB is the only entity that could do something. In the U.S., the government can alleviate some symptoms, but it’s going to be difficult in the short-term to address the unemployment issue.”
Stocks maintained losses as jobless claims rose by 2,000 to 414,000 in the week ended Sept. 3, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 405,000, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments fell.
Federal Reserve Chairman Ben S. Bernanke is due to speak in Minnesota today on the economic outlook at 1:30 p.m. New York time.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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