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U.S. Stocks Retreat With Dow Heading for Worst Week Since 2012

January 24, 2014

Jan. 24 (Bloomberg) -- U.S. stocks fell, pushing the Dow Jones Industrial Average toward the biggest weekly decline since May 2012, as equities slumped worldwide amid a selloff in emerging-market currencies.

Caterpillar Inc., General Electric Co. and Boeing Co. slid more than 2.4 percent to lead losses in the Dow. Kansas City Southern plunged 15 percent, the biggest retreat since 2008, after reporting lower-than-estimated earnings. International Game Technology tumbled 13 percent as the maker of slot machines posted first-quarter profit that missed analysts’ projections.

The Standard & Poor’s 500 Index retreated 1.6 percent to 1,799.09 at 2:12 p.m. in New York. The benchmark index has declined 2.1 percent this week to the lowest since Dec. 17. The Dow slid 244.59 points, or 1.5 percent, to 15,952.76 today. The 30-stock gauge is down 3.1 percent this week. Trading in S&P 500 stocks was 55 percent above the 30-day average at this time of day.

"The volatility of the emerging markets and the currency impacts are affecting U.S. markets," Eric Teal, who helps oversee $3.5 billion as the chief investment officer at First Citizens BancShares Inc. in Raleigh, North Carolina, said by phone. "Following the strong gains of last year, I think it’s to be expected that you might have an overreaction here of selling."

 

Emerging Markets

 

Emerging-market currencies had their worst selloff in five years yesterday as Argentine policy makers devalued the peso by reducing support in the foreign-exchange market. The Turkish lira plunged, Ukraine’s hryvnia sank to a four-year low and South Africa’s rand weakened beyond 11 per dollar for the first time since 2008. China’s banking regulator ordered its regional offices to increase scrutiny of credit risks in the coal-mining industry, said two people with knowledge of the matter, signaling government concern about possible defaults.

Investors are losing confidence in some of the biggest developing nations, extending the rout in currencies that began last year when the Federal Reserve signaled it would slow the pace of its monthly purchases of Treasuries and mortgage bonds. The S&P 500 fell 0.9 percent yesterday and the Dow dropped to a one-month low after a gauge of manufacturing activity in China unexpectedly contracted.

The MSCI Emerging Markets Index lost 1.3 percent, extending its decline for the year, while Europe’s equity benchmark slid the most since June.

 

‘Massive Selloff’

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