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While you were sleeping Equities extend slide

Thursday 13th June 2013

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Wall Street fell as investors found little to soothe their nervousness over a potential downgrade of the US Federal Reserve's bond-buying program.

In late afternoon trading in New York, the Dow Jones Industrial Average dropped 0.84 percent, the Standard & Poor's 500 Index fell 0.74 percent and the Nasdaq Composite lost 1.03 percent.

"There just isn't much news to offset the potential negative of what will eventually happen, which is the Fed tapering off. You don't have fundamental evidence that the Fed will or will not be tapering off soon, and the market is caught in the middle period," Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey, told Reuters.

The potential prospect of a taper in the Fed's US$85 billion of monthly bond-buying also tempered demand for a US 10-year debt auction.

The notes yielded 2.209 percent at the sale, the highest since October 2011, while the bid-to-cover ratio was 2.53, the lowest in 10 months, according to Bloomberg News.

Meanwhile, a Reuters poll showed that Janet Yellen, the Fed's vice chair, is by far the most likely candidate to replace Ben Bernanke when his second term at the helm ends early next year.

Forty of 44 economists in the Reuters poll said Yellen will take over for her boss in February 2014.

Some stocks bucked the trend.

Shares of Hewlett-Packard rose, last up 3.6 percent, after Chief Executive Officer Meg Whitman told CNBC the personal-computer maker was "a bit ahead" of its target in its turnaround plans.

"You don't have to wait five years to get results. I'd say we're just a bit ahead of where we thought we'd be," Whitman said. "We've got a long way to go. There's a lot of heavy lifting ahead."

In Europe, the benchmark Stoxx 600 Index ended the session with a 0.4 percent drop from the previous close. France's CAC 40 shed 0.4 percent, the UK's FTSE 100 weakened 0.6 percent, while Germany's DAX declined 1 percent.

Better-than-expected economic data wasn't sufficient to lift the mood. Euro-zone industrial output increased 0.4 percent in April, after a revised 0.9 percent rise in March, according to the European Union's statistics office.

It is proving a tough week in Greece. Stocks dropped after the government unexpectedly shut down the state broadcaster overnight, prompting national outrage. The government then said it would open a revamped broadcaster within weeks.

Separately, MSCI downgraded Greece to emerging market status, the first time a developed country suffered such a cut.

"The MSCI Greece Index fails to qualify on several market accessibility criteria," MSCI said in a statement.

Earlier this week the country failed to secure any bids in a sale of its gas monopoly, needed to meet the conditions of a financial rescue from the European Union and the International Monetary Fund.

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