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US: Stocks mixed as European, Asian markets sink
[NEW YORK] Wall Street stocks on Tuesday shook off much of the negative momentum from Asian and European equity markets, finishing the day mixed after a bruising open.
The Dow Jones Industrial Average dropped 51.28 points (0.29 per cent) to 17,801.20.
The broad-based S&P 500 slipped 0.49 (0.02 per cent) to 2,059.82, while the tech-rich Nasdaq Composite Index gained 25.77 (0.54 per cent) to 4,766.47.
US equities opened sharply lower, following gloomy sessions overseas trade sparked by tougher Chinese rules on lending and political instability in Greece. Analysts also cited reports that suggested the US Federal Reserve could move up its timetable for raising interest rates.
But US stocks ralllied in late morning trade.
"You saw what you've seen multiple times over the last year and a half," said Michael James, managing director of equity trading at Webush Securities. "Pullbacks are meant to be bought." Dow member Verizon Communications sank 4.1 per cent as it warned that fourth-quarter earnings would be pressured by a "highly competitive and promotion-filled" business environment.
The market also punished Verizon's rivals AT&T (-2.9 per cent) and Sprint (-3.8 per cent).
Citigroup fell 0.9 per cent after announcing that it expects a US$3.5 billion charge in the fourth quarter due to legal and restructuring costs. Chief executive Michael Corbat said the bank will still be "marginally profitable" despite the massive charge.
Bank of America lost 0.6 per cent as chief executive Brian Moynihan signalled that fourth-quarter trading revenues would be lower than last year.
Dow member Merck fell 3.0 per cent on concerns it overpaid in its US$9.5 billion acquisition of Cubist Pharmaceuticals. Analysts said the deal looked worse after a federal court Monday ruled key Cubist patents will lose their exclusivity more quickly than expected.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.22 per cent from 2.26 per cent Monday, while the 30-year dropped to 2.88 per cent from 2.90 per cent. Bond prices and yields move inversely.