Stocks Fall Slightly; GE Rises, Disney Declines
Stocks were modestly lower, off the lows of the session, as traders took a breather after Thursday's sharp rise in the wake of China's decision to further tighten monetary conditions.
TheDow Jones Industrial Average fell less than 10, after a sharp rise Thursdayon the heels of General Motors return to the public markets.
Disney, Bank of America , and Verizon fell, while General Electric and DuPont rose.
General Motors was down less than 1 percent after rising about 1 percent in its first day of resumed trading on the New York Stock Exchange.
The S&P 500 and the Nasdaq also declined. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 19.
Most of the 10 major S&P sectors fell, led by utilities, financials and energy. Materials rose.
China's central bank said it would raise banks' reserve requirements by 50 basis points starting beginning on November 29. The bank stopped short of raising base interest rates, but the move did represent a tightening of the country's economic policy.
China's decision was released at the same time Federal Reserve Chief Ben Bernanke spoke at a European Central bank conference in Frankfurt in defense of the Federal Reserve's policy to stimulate the economy. Bernanke said the best way to support the global economic recovery is to boost growth in the United States. The Fed's bond buying program has come under fire from the countries such as China for weakening the value of teh dollar.
Meanwhile, Ireland was still unclearhow much its banks would require, a day after the head of the nation's central bank said the company would need a loan of tens of billions of euros.
The news out of China pressured commodities and commodities-related stocks.
A number of agricultural products also were hit with margin increasesat the Chicago Mercantile Exchange. Investors will need to put up more money now to initiate or maintain a position in commodities ranging from butter to lumber, in an effort to calm the markets.
The price of oilfell near $81 a barrel, while the price of goldalso declined. The dollar slipped against a basket of currencies,as the euro moved higher on hopes Ireland would resolve its debt troubles.
Oil giants Exxon , Chevron and Hess all slipped.
Retailers offered bright spots. Ann Taylor rose more than 7 percent after news of a jump in same-store sales growth women's apparel chain. Foot Locker also reported better-than-expected results, sending shares soaring.
Gap shares declined after despite reporting results in line with expectations, as Stifel Nicolaus cut the retailer's price target to $25 from $28. Gap CEO said he doesn't expect a change in consumer sentiment in the fourth quarter.
Cisco shares were trading flat after news Thursday night that the company would buy back an additional $10 billion shares. The network equipment maker had previously authorized up to $72 billion in stock repurchases. The plan is a part of a "continued commitment" to return cash to shareholders, Cisco CFO Frank Calderoni said in a statement. The company's shares had fallen about 14 percent in November, since it delivered a disappointing earnings report.
Salesforce's stock, meanwhile, skyrocked more than 14 percent to the top of the S&P 500 after the cloud computing company beat estimates with a 1.8 percent rise in profit. At least 10 brokerages raised their price target for the stock.
Also on the earnings front, Dell shares rose after beating expectations on earnings and profit margins, but the tech giant missed its third-quarter revenue view.
And Autodesk reported earnings in line with Wall Street estimates, with revenue beating forecasts.
Google is reportedly in preliminary talks to buy Groupon, an online company that offers localized deals to consumers, according to a report on a Wall Street Journal website. Yahoo had offered $2 billion to $3 billion for the company earlier this year.
Meanwhile, Google is seeking to fill more than 2,000 positionsas it continues to expand globally.
Harrah's Entertainment pulled an initial public offering Friday that was expected to raise about $470 million, citing market conditions. The casino operator, which had planned to rebrand itself at Caesar's Entertainment, had received lukewarm interest from institutional investors.
In other news, KKRis reportedly in talks to buyDel Monte Foods . Sources said KKR has offered $18.50 per share for the food make, which would value the company at about $3.6 billion.
European shares were dragged lower by mining stocks again, while Asian markets ended mixed before China's announcement.
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