Stocks on Wall Street have slumped after China suddenly lifted its interest rates and a barrage of corporate earnings failed to live up to investors' expectations.The Dow Jones Industrial Average is down 111 points to 11,032, with IBM, Microsoft and Alcoa
Stocks on Wall Street have slumped after China suddenly lifted its interest rates and a barrage of corporate earnings failed to live up to investors' expectations.
The Dow Jones Industrial Average is down 111 points to 11,032, with IBM, Microsoft and Alcoa leading the decline.
The S&P 500 index has dropped 0.9% to 1173, as the energy, healthcare and technology sectors slumped. The technology-heavy Nasdaq Composite is down 1.1% to 2454.
China's lifting of the benchmark one-year lending and deposit rate by a quarter of a percentage point was the first time in nearly three years, as the government attempts to contain inflation and soaring property prices.
The move boosted the US dollar but hurt commodities and equities.
Apple’s iPad sales fell short of expectations and the company offered a conservative forecast for the current quarter, which drove the stock down 2.1% after hitting an all-time high on Monday.
IBM posted better-than-expected earnings and boosted to its full-year guidance. But the stock dropped 3.3% and was the Dow's worst performer. The shares also hit an all-time high on Monday.
Coca-Cola's third-quarter profit rose 8.4% after an improvement in the difficult North American region. Coke also said it will buy back $US2 billion in shares by the end of 2010. Shares rose 0.5%.
Other markets: Europe down,Asia up
European stocks fell, led producers of basic resources after China’s surprise interest-rate increase..
The Stoxx Europe 600 index closed down 0.5% at 265.24. The UK's FTSE 100 index fell 0.7% to 5703.89, France's CAC-40 index ended down 0.7% at 3807.17 and Germany's DAX slipped 0.4% to 6490.69.
Most Asian stock markets rose, with banks in Tokyo climbing after Citigroup's upbeat earnings report Monday. Korean and Taiwanese technology stocks declined on Apple's weaker-than-expected iPad sales.
Hong Kong's Hang Seng Index gained 1.3% to 23,763.73, the Shanghai Composite Index climbed 1.6% to 3001.85 and Japan's Nikkei Stock Average rose 0.4% to 9539.45.
Australia's S&P/ASX 200 edged up 0.1% to 4655.68, Korea's Kospi dropped 1% to 1857.32, and Taiwan's Taiex shed 0.2% to 8046.23.
Commodities: Oil, gold down
Crude futures fell as China's interest rate move sparked worries about demand for raw materials.
Light, sweet crude for November delivery traded $US2, or 2.6%, lower at $US81.08 a barrel in New York. The December contract fell $US2.22 to $US81.58. Brent crude on the ICE futures exchange traded $US2.07 lower at $US82.30 a barrel.
Gold futures plummeted as investors rushed to the dollar. The most actively traded gold contract, for December delivery, was recently down $US36.70, or 2.7%, at $US1335.40 an ounce in New York.
Currencies: Dollar up, euro down
The US dollar racked up gains across the currency board as China put a brake on its rapid economic growth, while the Bank of Canada issued a tepid assessment of the global recovery.
The commodity-linked Australian and New Zealand dollars, which depend on China's growth, both dropped more than 1.5% against the dollar. After touching parity against the greenback at the weekend, the Australian dollar has dropped back close to 97USc.
Canadian dollar gave up more ground as the central bank said the global recovery was entering a new phase and said it expected a US recovery to be weaker than expected. The US dollar gained nearly 1.5% against the loonie.
The euro was at $US1.3806 from $US1.3943 late on Monday. The euro dipped as low as $US1.3767, its lowest level in two weeks.
The dollar was at ¥81.51 from ¥81.25, while the euro was at ¥112.56 from ¥113.28. The UK pound was at $US1.5727 from $US1.5887. The dollar was at 0.9701 Swiss francs from 0.9590.
