Stocks skid on Korea hostilities
Tuesday, November 23, 2021 4:45 PM

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In New York, stocks were hit with a trifecta of gloom Tuesday as violence erupted on the Korean peninsula, worries about Europe's debt crisis expanded and the Federal Reserve issued a dour economic outlook.

The Dow Jones Industrials hurtled earthward 142.21 points, or 1.3%, to close at 11,036.70.

The S&P 500 was down 17.11 points to 1,180.73. The tech-rich Nasdaq Composite Index was off 37.07 points to 2,494.95.

The retreat was sparked by an exchange of artillery fire along the disputed sea border between North and South Korea Tuesday morning. The skirmish, which killed two South Korean soldiers and wounded several civilians, was one of the worst since the Korean War of the 1950s ended in armistice.

In the currency market, the U.S. dollar and the Japanese yen both rose sharply. Gold prices and U.S. Treasuries also moved higher as investors flocked to safe haven assets.

The stock declines were broad based. Hewlett Packard was the only Dow stock in the black. Shares of the computer maker were up 0.9%, after it reported better-than-expected quarterly results.

Chevron and Exxon both fell about 2% as the stronger dollar pressured oil prices. The dollar also weighed on shares of big multinational firms such as IBM, Caterpillar and 3M.

Clothing retailer J. Crew agreed to be acquired by buyout firms TPG Capital and Leonard Green & Partners for $2.8 billion U.S. Shares of J. Crew rose about 16% shares had been halted most of the morning after rallying as much as 22% in premarket trading.

Blackstone Group's pursuit of electric power provider Dynegy has come to an end after activist shareholders objected to the takeover, Dynegy said in a statement.

Meanwhile, government data that showed the U.S. economy grew at 2.5% annual rate in the third quarter was largely shrugged off by investors.

Trading could be choppy this week, with many market participants taking time off ahead of the Thanksgiving holiday. All U.S. markets will be closed Thursday.

On the economic front, the U.S. economy grew at a better than expected 2.5% annual rate in the third quarter, faster than 2% rate previously reported, the government said before the opening bell.

On the housing front, existing home sales declined 2.2% to a seasonally adjusted annual rate of 4.43 million in October from 4.53 million in September, according to the National Association of Realtors. Economists had expected a sales rate of 4.42 million in the month.

Meanwhile, the Federal Reserve lowered its outlook for U.S. economic growth this year and next. The central bank also projected that unemployment would remain elevated into next year.

But the bleak forecast was expected, and investors are more concerned about geopolitical risks, according to some experts.

The Federal Reserve lowered its estimates for U.S. economic growth this year and next, and raised its outlook for unemployment.

The Fed now expects 2010 gross domestic product to increase between 2.4% and 2.5% this year, compared with an earlier projection of growth between 3% and 3.5%. In 2010, the Fed predicts GDP in the range of 3% to 3.6%, down from the last forecast in June.

The Fed also said the unemployment rate will be between 9.5% and 9.7% for all of 2010. Next year, the bankers believe joblessness could be as high as 9.1%, compared with a previous estimate of between 8.3% and 8.7%.

The price on the benchmark 10-year U.S. Treasury moved up, lowering the yield to 2.76% from 2.81% late Monday. Treasury prices and yields move in opposite directions.

Oil dipped eight cents a barrel to $81.50 U.S. The price of an ounce of gold gained $9.02 to $1,375.74.

(Source: )
(Source: Quotemedia)


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