U.S. stocks declined on fears of fed rate hike


Moscow. On 5 November. U.S. stocks declined on Wednesday, with a maximum of three months after the data on US labor market and statements of the heads of the Federal reserve system (the fed), which investors took as a signal of the approach of raising interest rates, reports Bloomberg.

Fed Chairman Janet Yellen and reserve Bank of new York William Dudley confirmed the possibility of increasing interest rates in the US at the next meeting of the Central Bank, which will be held December 15-16. In particular, Yellen said the decision to raise rates in mid-December “a real possibility”.

However, fed Vice Chairman Stanley Fischer expressed confidence that inflation in USA is not too far from the Central Bank’s target level (2% annual) that markets are also considered a signal of the imminent increase in the cost of lending.

According to a statement released on Wednesday the data of the research Institute of the organization of American employers ADP, the number of jobs in the U.S. increased in October to 182 thousand 182 thousand against the expected growth for September was revised from 200 thousand to 190 thousand

The index of business activity in the services USA (ISM Non-Manufacturing) in October increased from 56.9 points to 59.1 points, whereas analysts expected decrease to 56.5 points. The rate of growth of activity in October were the second-largest in the last decade. Thus, the indicator recovered to the level of July-August, which was the highest since 2005.

The excess of the index mark in 50 points testifies to strengthening of business activity in the services sector, while an index value below 50 indicates its decline.

“The stock market has grown substantially since the end of September, but we’re not going back to that record right now. Investors await new data this week to assess the potential of a rate hike in December,” said Thomas Garcia, of Thornburg Investment Mangement Inc.

Friday will bring the official data on the dynamics of employment and unemployment in the U.S. in October. According to experts, the number of jobs in the country increased by 182 thousand, including 169 thousand in the private sector, while the unemployment rate declined from 5.1% to 5%.

On Wednesday shares fell energy companies, their industry index fell 1% amid falling prices for WTI crude oil for maximum three weeks by 3.3%. Chesapeake Energy Corp. lost 2% at the end of the auction because the company incurred a loss in the third quarter due to the impairment of oil and gas fields for $5.4 billion Courses of securities Chevron Corp. and Exxon Mobil Corp. fell more than 1%.

The market value of Time Warner fell 10%, as the company forecast profits for 2016 was weaker than analysts ‘ expectations. After it has fallen in price paper many media holdings: Walt Disney Co. – 2%, Viacom Inc. – by 6.6%. Owned by billionaire Rupert Murdoch’s 21st Century Fox, which showed quarterly revenue was worse than expected, reduced the level of capitalisation of 5.2%.

Due to poor reporting, the price of securities Cerner Corp., involved in the development of software for organization of medical data, decreased by 6.8% – the biggest decline since August 2011.

The Dow Jones Industrial Average following the results of session on 4 November dropped 50,57 paragraph (0,28%) – to 17867,58 item.

Standard & Poor’s 500 decreased by of 7.48 points (0,35%), to 2102,31 item.

The value of the Nasdaq Composite index fell 2.65 points (0,05%) – to 5142,48 item.