Wednesday 20th November 2013
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Wall Street slipped, pushing the Dow Jones Industrial Average down from yesterday's record-high close, as investors eyed a speech by Federal Reserve Chairman Ben Bernanke later today for the latest take on the state of the world's largest economy.
In afternoon trading in New York, the Dow Jones Industrial Average slipped 0.09 percent, while the Standard & Poor's 500 Index eased 0.10 percent, and the Nasdaq Composite Index fell 0.20 percent.
Shares of Best Buy slumped, last down 8.4 percent, after the company warned that keeping up with rivals' discount strategies during the holiday season will crimp margins.
"First and foremost, we are committed to being competitive on price," Sharon McCollam, Best Buy chief financial officer, said in a statement. "So if our competition is in fact more promotional in the fourth quarter, we will be too and that will have a negative impact on our gross margin."
Meanwhile, the Organisation for Economic Cooperation and Development downgraded its global growth forecasts for this year, and next. The global economy will grow 2.7 percent in 2013 and 3.6 percent in 2014, down from the 3.1 percent and 4 percent it forecast in May, the OECD said.
Even so, investors are keen to join the party on Wall Street, which is near record highs.
"If you're not in the market, you're looking for any modest pullback to get in," Dan Veru, chief investment officer of Palisade Capital Management, which has US$4.5 billion in assets and is based in Fort Lee, New Jersey, told Reuters. "There just is a lot of cash and a lot of managers that are underperforming because they've been perhaps too cautious."
So far this year, the Dow has gained 25 percent, while the S&P 500 has risen 30 percent, and the Nasdaq has added 36 percent.
"We've had a big run," Bruce Bittles, chief investment strategist at RW Baird & Co, told Bloomberg News. His firm oversees $US100 billion. "My suspicion is that the market might go sideways now for a little while before we encounter a year-end rally in December."
Among a slew of Fed officials scheduled to speak this week is Bernanke, due to talk on Tuesday evening after the market has closed, while investors are also eyeing the minutes from the Fed's latest meeting, due to be released on Wednesday.
Shares of Home Depot rose, last up 1.5 percent and the biggest gainer in the Dow, after the company posted results that exceeded expectations and lifted its earnings forecast.
In Europe, the Stoxx 600 Index dropped 0.7 percent. The UK's FTSE 100 Index and Germany's DAX both fell 0.4 percent, while France's CAC 40 sank 1.1 percent.
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