Shares of commodity companies are leading the decline in the U.S. market


Moscow. December 18. U.S. stocks declined at the end of trading on Thursday, leaders of falling steel shares of resource companies, reports Bloomberg.

The decision of the Federal reserve system (the fed) to raise interest rates, earlier this week, provoked the strengthening of the US dollar, which negatively affected the commodity markets.

As reported, following the meeting of 15-16 December, the fed raised the rate for the first time since June 2006 – to 0.25-0.50% per annum.

The U.S. Central Bank at the last meeting, gave a more restrained rate forecasts of higher interest rates after 2016, although the assessment of the long-term rate rate for this cycle remains the same – 3%.

The initial reaction of the U.S. stock market on the move was positive: rates rise investors adopted the view that the U.S. economy is strong enough to cope with the tightening policy of the Central Bank. However, the decline in commodity markets has reinforced concerns about the Outlook for the global economy, experts say.

A strong dollar, in addition to the negative impact on commodity markets, putting pressure on profits of American exporters receiving a considerable part of revenues abroad.

“The initial euphoria of the market, associated with the fact that the fed finally made the move, took place, and traders understand that the rise rate is not too positive for the stock market,” notes President and chief investment officer of Stewart Capital Advisors Malcolm Poly.

Indicators 9 out of 10 main industry groups of the S&P 500 declined on Thursday, the indexes for energy and mining companies lost more than 1.9%.

Stock quote Marathon Oil and Williams Cos. fell in the course of trading by more than 7.2 per cent, Consol Energy and Energy Balero – not less than 2.1%. WTI crude oil continues to fall, trading below $35 per barrel.

The price decrease of securities of Newmont Mining and Freeport-McMoRan amounted to more than 7.7% amid falling prices for gold and copper.

The indicator of the FIS in the S&P 500 index lost Thursday’s 1.6%, the leaders of the fall of prices were the shares of Bank of America and JPMorgan.

The value of the shares of the supplier of food products General Mills fell by 3.3%, as the statements of the company were worse than market expectations.

The paper-Oracle’s quarterly revenue which fell short of forecasts, fell by 0.4%.

The Dow Jones Industrial Average to the close of the market on Thursday dropped on 253,25 paragraph (1,43%) – to 17495,84 item.

Standard & Poor’s 500 declined 31,18 points (1.5%), amounting to 2041,89.

Value of index Nasdaq Composite has decreased on 68,58 paragraph (1,35%) – to 5002,55 item.