Rattled by remarks from Fed officials warning that another rate hike is likely this year, Wall Street backed off Monday's record highs and closed lower. Recent economic data contributed to the defensive tone as manufacturing indicators beat estimates while inflationary pressures were benign. Nine of the ten S&P 500 sectors were in the red while Dow decliners led gainers by 2 to 1 with component stock Johnson & Johnson down by 1.6% in sympathy with heavy losses in the healthcare sector.
Stocks added to their premarket losses after NY Fed president William Dudley said another rate hike could come as soon as next month, unnerving investors before tomorrow's Federal Open Market Committee minutes. This sentiment was echoed by Atlanta Fed president Dennis Lockhart, keeping shares under pressure, while at the same time driving Treasury yields higher and undermining interest rate-sensitive sectors like telecoms and utilities.
In economic news, consumer prices were unchanged last month, but increased an anemic 0.1% excluding food and fuel prices.
Housing starts were up 2.1% but permits fell 0.1%, while industrial production increased 0.7% and capacity utilization rose to 75.9% from 75.4%, both better than Wall Street expectations.
Here's where the markets stood at the close:
Dow Jones Industrial Index was down 84.03 points (-0.45%)
S&P 500 was down 12.00 points (-0.55%)
Nasdaq Composite Index was down 34.90 points (-0.66%)
FTSE 100 was down 0.68%
Nikkei 225 was down 1.62%
Hang Seng Index was down 0.09%
Shanghai China Composite Index was down 0.49%
(+) GK (+17.74%) To be acquired by Cintas ( CTAS ) for $2 billion, or $97.50 per share
(+) ANTH (+7.89%) Data and Safety Monitoring Board gives go-ahead for study of sollpura for cystic fibrosis
(+) DKS (+7.05%) Reported better-than-expected Q2 results and raised FY16 EPS outlook
(-) HAIN (-26.31%) Announced a delay in Q4 and FY16 results to review revenue associated with certain concessions was accounted for in the correct period.
(-) EVOK (-11.92%) Q2 loss narrows from year ago, but did not report quarterly revenue
(-) HTBX (-11.29%) Reported a narrower-than-expected Q2 loss but with no revenue
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