You are here

US: Wall St opens lower as stronger dollar weighs

Tuesday, May 26, 2015 - 22:10
NYSEREUTERS0606.jpg

[NEW YORK] Wall Street opened lower on Tuesday after the dollar jumped to a one-month high on data showing that U.S. business investment spending plans increased solidly for a second straight month in April.

Federal Reserve Chair Janet Yellen said on Friday that the central bank could raise interest rates this year if the economy keeps improving as expected.

The dollar was hovering at an eight-year high against the yen and a one-month peak against a basket of other big currencies.

"It isn't normal to see such large moves in currencies,"said Adam Sarhan, chief executive of Sarhan Capital in New York. "Such moves heightens volatility in the market."

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 1.0 per cent last month, a hopeful sign for manufacturing activity after a recent long spell of weakness.

That was followed by data that showed single-family home prices in the United States rose more than expected in March from a year earlier, led again by strong increases in the western half of the country.

At 9:41 am ET (1341 GMT) the Dow Jones industrial average was down 111.31 points, or 0.61 per cent, at 18,120.71, the S&P 500 was off 10.45 points, or 0.49 per cent, at 2,115.61 and the Nasdaq Composite was down 20.02 points, or 0.39 per cent, at 5,069.34.

Investors will be keeping a keen eye on further data, to be released in the morning, for signs that the economy is recovering after hitting a soft patch in the first quarter.

All 10 major S&P 500 sectors were lower in early trading, with the information technology index's 1.04 per cent fall leading the way.

Apple fell nearly 1 per cent to US$121.39 and was the biggest drag on the S&P 500 and Nasdaq.

Charter Communications' shares were up 1.3 per cent to US$177.31 after it agreed to buy Time Warner Cable for US$55.8 billion. Time Warner Cable rose 5 per cent to US$179.45, well below Charter's cash and stock offer of US$195.71.

LivePerson shares were up 13.9 per cent at US$10.24 after an Israeli website reported software provider Nice Systems was in talks to acquire the chat software firm. Nice was down 3.7 per cent at US$62.64.

Declining issues outnumbered advancers on the NYSE by 2,117 to 618, for a 3.43-to-1 ratio on the downside. On the Nasdaq, 1,640 issues fell and 713 advanced for a 2.30-to-1 ratio favoring decliners.

The S&P 500 index showed two new 52-week highs and four new lows while the Nasdaq recorded 23 new highs and 25 new lows.

REUTERS