Tuesday, March 31, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Dow plunges as multiple worries vex investors

Wall Street

A board above the trading floor of the New York Stock Exchange shows the closing number for the Dow Jones industrial average, Thursday, July 3, 2014. The Dow Jones industrial average topped 17,000 for the first time Thursday, the index's first big 1,000-point milestone this year, following news that hiring in the U.S. accelerated last month. (AP Photo/Richard Drew)

By
From page A1 | August 01, 2014 |

NEW YORK — For stock investors, the red flags were everywhere on Thursday.

There were weak corporate results, the looming end of stimulus from the Federal Reserve and tensions between the West and Russia. On top of that, some investors feared that stocks have become too pricey after three years without a significant downturn.

The confluence of worries sent the Dow Jones industrial average tumbling more than 300 points, its worst one-day drop since February. The plunge snapped a string of five straight monthly gains, and pushed the blue-chip index to a slight loss for the year.

But it wasn’t just stocks that suffered. Oil fell to its lowest level since March, gold dropped and even Treasurys edged lower.

The stock market fell in early trading after a dose of bad earnings news, and the losses accelerated throughout the day. Whole Foods Market and Exxon Mobil sparked the selling after their quarterly results late Wednesday disappointed investors. Yum Brands, the owner of KFC and Pizza Hut, slumped after it said that its earnings would be crimped by a food safety scandal in China that involved repacked meat.

Also driving the downturn were concerns that the Fed could raise short-term interests faster than expected because of a rebound in U.S. growth during the spring.

The stock market has climbed nearly 200 percent since March 2009, with the most recent leg of that surge pushing the Standard & Poor’s 500 index to an all-time high a week ago. The S&P 500 hasn’t suffered a sell-off severe enough to qualify as a correction, Wall Street parlance for a fall of 10 percent or more from a peak, since October 2011.

“We’ve been on a strong run,” said Jerry Braakman, chief investment officer at First American Trust. “There’s just more concern that stock valuations are rich compared to historical norms.”

The S&P 500 dropped 39.40 points, or 2 percent, to 1,930.67, its biggest loss since April 10. The drop pushed the index to its first monthly loss since January.

The Dow Jones industrial average plunged 317.06 points, or 1.9 percent, to 16,563.30. The drop was the biggest since Feb. 3 and the index is now 13.36 points lower for the year. The Nasdaq composite fell 93.13 points, or 2.1 percent, to 4,369.77.

Exxon Mobil stock fell $4.31, or 4.2 percent, to $98.94 after the energy company said that oil and gas production slipped 6 percent in the second quarter, disappointing analysts. The decline was driven by the expiration of rights to a field in Abu Dhabi and natural field declines. Whole Foods Market fell 88 cents, or 2.3 percent, to $38.23 after reporting quarterly sales that fell shy of expectations. The upscale grocer also lowered its sales forecast for the year.

Stock market valuations have climbed steadily for almost three years. Investors have become more optimistic about the outlook for earnings as economic growth has improved. The price-earnings ratio for S&P 500 stocks rose as high 15.9 earlier this month from 10.5 in September 2011.

Investors are also concerned about a range of geopolitical issues that could ultimately harm global growth.

In Europe, tensions are escalating between the European Union and Russia after the downing of a passenger plane over Ukraine. The European Union on Thursday revealed the details of broad economic sanctions against Russia. Argentina’s debt default Wednesday was also added to investors’ list of concerns.

Paul Zemsky, chief investment officer of Multi-Asset Strategies and Solutions at Voya Investment Management, said the main driver behind Thursday’s sell-off was a reassessment of the outlook for interest rates in the U.S.

The Fed has kept short-term interest rate at close to zero for more than five years, and bought bonds to hold down long-term interest rates. The goal is to encourage borrowing and spending.

Policy makers are now becoming more optimistic about the outlook for the U.S. economy after growth expanded by a better-than-expected 4 percent in the second quarter. Although the Fed hasn’t said when it will start raising rates, investors may be starting to assume that the timing will happen sooner, if the economy continues to improve and inflation picks up.

Friday’s monthly jobs report is the next piece of data that investors will examine for a sense of where the economy and rates could be headed.

“We’re closer to the first move higher in interest rates,” Zemsky said. “And there’s definitely a camp that believes that the only reason that we’re at these levels is because the Fed has kept the rates at zero.”

Despite Thursday’s weak corporate results, investors should remember that the overall outlook for profits is strong, said Zemsky.

Earnings are still at record levels, and expected to grow by 9 percent in the second quarter, according to data from S&P Capital IQ. That compares to growth of 4.9 percent in the same period a year earlier and 3.4 percent growth in the first three months of this year.

In other markets, gold fell $13.60, or 1.1 percent, to $1,281.30 an ounce. Silver slipped 19 cents, or 0.9 percent, to $20.41 an ounce.

Benchmark U.S. crude fell $2.10 to close at $98.17 a barrel in New York, its lowest level since March 17. Oil’s high for the year was $107.26, on June 20; its low was $91.66, set on January 9.

Brent crude, a benchmark for international oils used by many U.S. refineries, fell 49 cents Thursday to close at $106.02 in London.

Prices for U.S. government bonds were little changed. The yield on the 10-year Treasury note edged up to 2.57 percent from 2.56 percent on Wednesday.

 

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

Records detail shooting victim’s court history

By Jess Sullivan | From Page: A3, 16 Comments | Gallery

 
 
Free Healthier Living workshops begin this week

By Kevin W. Green | From Page: A5

Frazier to deliver keynote at Solano EDC event

By Kevin W. Green | From Page: B10

 
25th annual Rush Ranch Open House on April calendar

By Ryan McCarthy | From Page: A2

 
Helen Mirren film set for debut

By Amy Maginnis-Honey | From Page: B9 | Gallery

 
 
Saturday Club schedules Shower of Flowers event

By Amy Maginnis-Honey | From Page: A5

WIB to host regional career fair

By Kevin W. Green | From Page: B10 | Gallery

 
Group plans Haiti missions fundraisers

By Amy Maginnis-Honey | From Page: A5, 2 Comments

Travel presentation ready to roll in Vacaville

By Amy Maginnis-Honey | From Page: A5

 
.

US / World

 
 
Ex-FBI agent sentenced to 10 years in Afghan kickback scheme

By The Associated Press | From Page: B2

 
BNSF railroad adds new safety rules for crude oil trains

By The Associated Press | From Page: B2

 
California leaders routinely use private email

By The Associated Press | From Page: B2, 1 Comment

 
Endangered bighorn sheep moved to Yosemite, Sequoia parks

By The Associated Press | From Page: A10 | Gallery

An apple a day may not keep the doctor away, study says

By The Associated Press | From Page: B2

 
Church van crashes into canal, killing 8 and injuring 10

By The Associated Press | From Page: B2

 
Tennessee pastor, son who saved 3 boys among Carnegie Heroes

By The Associated Press | From Page: B2

Pentagon chief considers easing of enlistment standards

By The Associated Press | From Page: B10

 
NSA: Car smashes into police vehicle at Fort Meade; 1 dead

By The Associated Press | From Page: B2 | Gallery

Former Israeli Premier Olmert convicted in corruption case

By The Associated Press | From Page: B2

 
Prosecutors: Co-pilot treated for suicidal tendencies

By The Associated Press | From Page: B2

Guinea shuts border with Sierra Leone in effort to end Ebola

By The Associated Press | From Page: B2

 
Saudi-led forces strike Yemen rebels, blockade ports

By The Associated Press | From Page: B2

Iran nuclear talks near deadline; differences remain

By The Associated Press | From Page: B2

 
Prosecution rests its case against Boston Marathon bomber

By The Associated Press | From Page: B2

.

Opinion

Rebuild Gaza to avert next war

By Former President Jimmy Carter | From Page: A13

 
Reid’s US Senate legacy: Obstruction

By Jennifer Rubin | From Page: A13, 8 Comments

State moves up national school spending chart

By Dan Walters | From Page: A13

 
.

Living

Community Calendar: March 31, 2015

By Susan Hiland | From Page: A2

 
.

Entertainment

NBC, Cirque du Soleil bringing ‘The Wiz’ to TV, Broadway

By The Associated Press | From Page: B9

 
Animal Planet lives wild with its new programming slate

By The Associated Press | From Page: B3

 
Attorney: Robin Williams’ wife wants to keep wedding tuxedo

By The Associated Press | From Page: B3

Eliane Elias enjoys musical homecoming on new CD

By The Associated Press | From Page: B3

 
5 things to know about new ‘Daily Show’ anchor Trevor Noah

By The Associated Press | From Page: B3, 1 Comment | Gallery

 
TVGrid March 31

By Daily Republic Syndicated Content | From Page: A11

.

Sports

Four No. 1 seeds in the women’s Final Four

By The Associated Press | From Page: B1

 
UConn reaches 8th straight Final Four with win over Dayton

By The Associated Press | From Page: B1

Grizzlies beat Kings 97-83 to end three-game skid

By The Associated Press | From Page: B1 | Gallery

 
Cauley-Stein, Kaminsky, Okafor among Wooden Award finalists

By The Associated Press | From Page: B1

Hendricks’ shutout streak ends, Cubs top Giants

By The Associated Press | From Page: B1

 
Lawrie hits 2 homers as A’s rout Rockies 11-2

By The Associated Press | From Page: B1

Montoya has swagger back, but also shows softer side

By The Associated Press | From Page: B1 | Gallery

 
A year later than expected, Michigan St back in Final Four

By The Associated Press | From Page: B1

Connecticut governor: move ’16 Final Four unless law changes

By The Associated Press | From Page: B1

 
Raiders re-sign free agent defensive lineman C.J. Wilson

By The Associated Press | From Page: B1

2 Alabama players arrested in separate weekend cases

By The Associated Press | From Page: B1

 
Falcons fined, lose draft pick for pumping in fake noise

By The Associated Press | From Page: B1

Racial quotas controversy re-emerges in South African sport

By The Associated Press | From Page: B1

 
NFL suspends Browns GM for texting, team holds onto picks

By The Associated Press | From Page: B1

Kaminsky, Okafor lead 2014-15 AP All-America team

By The Associated Press | From Page: B1

 
Ex-NASCAR driver gets jail after 3-state high-speed chase

By The Associated Press | From Page: B1

Nebraska, winner in 14 of last 15, at front of Big Ten surge

By The Associated Press | From Page: B1

 
McGraw appreciates Notre Dame women’s run more than ever

By The Associated Press | From Page: B1 | Gallery

Gonzaga’s great season ends in Elite Eight but more ahead

By The Associated Press | From Page: B1

 
StubHub files lawsuit against Ticketmaster

By The Associated Press | From Page: B1, 1 Comment

Judge again rules Joe Paterno can’t sue for contract breach

By The Associated Press | From Page: B1

 
Free agent linebacker Lance Briggs visiting with 49ers

By The Associated Press | From Page: B1

Fiancee says she discarded box at Aaron Hernandez’s request

By The Associated Press | From Page: B1

 
.

Business

US consumer spending edges up 0.1 percent in February

By The Associated Press | From Page: B4

 
UnitedHealth bulks up for prescription drug cost battle

By The Associated Press | From Page: B4

Business forecasters boost 2-year outlook for US economy

By The Associated Press | From Page: B4

 
Amazon.com offering to help get jobs done around the house

By The Associated Press | From Page: B4

McDonald’s to test all-day breakfast beginning in April

By The Associated Press | From Page: B4

 
SEC files fraud charges against Lynn Tilton, firms

By The Associated Press | From Page: B4

US university, foundation invested in frozen Chinese stocks

By The Associated Press | From Page: B4

 
Regulators plan to drop case at closed California nuke plant

By The Associated Press | From Page: B4

 
Michigan entrepreneur claiming idea for Heinz Dip & Squeeze

By The Associated Press | From Page: B4 | Gallery

.

Obituaries

.

Comics

For Better or Worse March 31

By Daily Republic Syndicated Content | From Page: B7

 
Garfield March 31

By Daily Republic Syndicated Content | From Page: B7

Crossword March 31

By Daily Republic Syndicated Content | From Page: B8

 
Zits March 31

By Daily Republic Syndicated Content | From Page: B7

Get Fuzzy March 31

By Daily Republic Syndicated Content | From Page: B7

 
Word Sleuth March 31

By Daily Republic Syndicated Content | From Page: B8

Bridge March 31

By Daily Republic Syndicated Content | From Page: B8

 
Sudoku March 31

By Daily Republic Syndicated Content | From Page: B8

Baby Blues March 31

By Daily Republic Syndicated Content | From Page: B7

 
Frank and Ernest March 31

By Daily Republic Syndicated Content | From Page: B7

B.C. March 31

By Daily Republic Syndicated Content | From Page: B7

 
Blondie March 31

By Daily Republic Syndicated Content | From Page: B7

Peanuts March 31

By Daily Republic Syndicated Content | From Page: B7

 
Baldo March 31

By Daily Republic Syndicated Content | From Page: B7

Beetle Bailey March 31

By Daily Republic Syndicated Content | From Page: B7

 
Dilbert March 31

By Daily Republic Syndicated Content | From Page: B7

Cryptoquote March 31

By Daily Republic Syndicated Content | From Page: B8

 
Sally Forth March 31

By Daily Republic Syndicated Content | From Page: B7

Pickles March 31

By Daily Republic Syndicated Content | From Page: B7

 
Rose is Rose March 31

By Daily Republic Syndicated Content | From Page: B7

Wizard of Id March 31

By Daily Republic Syndicated Content | From Page: B7

 
.

Discover Solano Spring/Summer 2015

Ryde Hotel a speakeasy from the past

By Susan Winlow | From Page: DIS11

Walnut Grove shows a bit of historic Japan

By Susan Winlow | From Page: DIS12

Fresh, fruity, summer and fall Delta pitstops

By Susan Winlow | From Page: DIS16

Discover Solano Spring 2015: Benicia

By Daily Republic | From Page: DIS21

Discover Solano Spring 2015: Benicia Fire Museum

By Daily Republic | From Page: DIS22

Discover Solano Spring 2015: Dixon

By Daily Republic | From Page: DIS23

Discover Solano Spring 2015: Jepson Prairie

By Daily Republic | From Page: DIS24

Discover Solano Spring 2015: Fairfield

By Daily Republic | From Page: DIS25

Discover Solano Spring 2015: Anheuser-Busch Brewery Tour

By Daily Republic | From Page: DIS26

Discover Solano Spring 2015: Jelly Belly Candy Co.

By Daily Republic | From Page: DIS26

Discover Solano Spring 2015: Fairfield Aquatics Complex

By Daily Republic | From Page: DIS27

Discover Solano Spring 2015: Travis Air Museum

By Daily Republic | From Page: DIS27

Discover Solano Spring 2015: Suisun Valley

By Daily Republic | From Page: DIS29

Discover Solano Spring 2015: Manka’s Corner

By Daily Republic | From Page: DIS31

Discover Solano Spring 2015: Il Fiorello Olive Oil Company

By Daily Republic | From Page: DIS32

Discover Solano Spring 2015: Glashoff’s Studio

By Daily Republic | From Page: DIS32

Discover Solano Spring 2015: Rio Vista

By Daily Republic | From Page: DIS33

Discover Solano Spring 2015: Brannan Island State Park

By Daily Republic | From Page: DIS34

Discover Solano Spring 2015: Foster’s Bighorn Bar

By Daily Republic | From Page: DIS35

Discover Solano Spring 2015: Sandy Beach

By Daily Republic | From Page: DIS35

Discover Solano Spring 2015: Suisun City

By Daily Republic | From Page: DIS37

Discover Solano Spring 2015: Suisun City waterfront

By Daily Republic | From Page: DIS38

Discover Solano Spring 2015: Rush Ranch

By Daily Republic | From Page: DIS39

Discover Solano Spring 2015: Suisun Wildlife Center

By Daily Republic | From Page: DIS39

Discover Solano Spring 2015: Vacaville

By Daily Republic | From Page: DIS40

Discover Solano Spring 2015: Nut Tree Plaza

By Daily Republic | From Page: DIS43

Discover Solano Spring 2015: Vallejo

By Daily Republic | From Page: DIS45

Discover Solano Spring 2015: Bay Area Ridge Trail

By Daily Republic | From Page: DIS46

Discover Solano Spring 2015: Six Flags Discovery Kingdom

By Daily Republic | From Page: DIS46

Discover Solano Spring 2015: Solano County

By Daily Republic | From Page: DIS48

Discover Solano Spring 2015: Western Railway Museum

By Daily Republic | From Page: DIS49

Discover Solano Spring 2015: Golf Courses

By Daily Republic | From Page: DIS49

Discover Solano Spring 2015: Grizzly Island

By Daily Republic | From Page: DIS50

Discover Solano Spring 2015: Calendar of Events

By Daily Republic | From Page: DIS52

Discover Solano Spring 2015: Winters

By Daily Republic | From Page: DIS54

Discover Solano Spring 2015: Napa County

By Daily Republic | From Page: DIS55

Discover Solano Spring 2015: Sonoma County

By Daily Republic | From Page: DIS57

Discover Solano Spring 2015: Yolo County

By Daily Republic | From Page: DIS58