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US: Stocks fall as dollar surges
[NEW YORK] Wall Street stocks fell sharply on Tuesday on a strengthening US dollar despite news of Charter Communication's US$78.7 billion deal to buy Time Warner Cable.
The Dow Jones Industrial Average dropped 190.48 points (1.04 per cent) to 18,041.54.
The broad-based S&P 500 fell 21.86 (1.03 per cent) to 2,104.20, while the tech-rich Nasdaq Composite Index dropped 56.61 (1.11 per cent) to 5,032.75.
The dollar rose sharply against the euro and other currencies following solid US economic data and worries over increasingly cash-short Greece's talks with creditors.
The revival of Greece worries "causes a weaker euro and a stronger dollar, and that adds to concerns for everybody who does business overseas," said Michael James, managing director of equity trading at Wedbush Securities.
Stronger US data has also sparked speculation the US Federal Reserve will hike interest rates "sooner than people are looking for," Ms James said.
Time Warner Cable jumped 7.3 per cent following Charter's announcement to create a cable giant. The move comes after Comcast in April withdrew a bid for Time Warner Cable in the wake of opposition from antitrust regulators. Charter gained 2.5 per cent. Comcast shares added 1.2 per cent.
Many technology stocks retreated, including Dow member Apple (-2.2 per cent), Google (-1.4 per cent), Facebook (-1.5 per cent) and biotech companies like Amgen (-2.8 per cent).
Petroleum stocks such as Chevron (-1.5 per cent) and Anadarko Petroleum (-2.3 per cent) suffered with the drop in oil prices. Lower copper prices dented metals and oil giant Freeport-McMoRan (-4.3 per cent).
Airlines stocks were also weak, with Delta Air Lines falling 3.1 per cent and United Continental dropping 3.3 per cent.
First Solar fell 7.3 per cent after RBC Capital Markets downgraded the stock, saying competitors have caught up with its low-cost modules.
Bond prices rose. The yield on the 10-year US Treasury dropped to 2.14 per cent from 2.21 per cent Friday, while the 30-year fell to 2.89 per cent from 2.99 per cent. Bond prices and yields move inversely.