The Clinton Herald, Clinton, Iowa

Business & Technology

December 6, 2013

Stocks fall on Wall Street; Retailers slump

NEW YORK (AP) — The outlook for hiring is improving and the economy is growing at its fastest pace in more than a year, so what’s the bad news for the stock market?

Stocks fell Thursday after the government reported that the number of Americans applying for unemployment benefits dropped to the lowest in nearly six years last week. Also, the U.S. economy grew at a 3.6 percent annual rate from July through September, the fastest since early 2012.

Investors believe the encouraging signs from the economy will push the Federal Reserve closer to pulling back on its $85 billion-a-month bond-buying program. That stimulus, which is intended to hold down interest rates, has been helping to power this year’s record-setting run in the stock market.

The losses put the Standard & Poor’s 500 index on track for its fifth loss in a row, matching its longest losing streak since September.

“If they do cut the bond purchases, the knee-jerk reaction for the market will be to move down,” said Chris Gaffney, a senior market strategist at EverBank.

The S&P 500 index dropped eight points, or 0.5 percent, to 1,784, as of 3:12 p.m. Eastern. The Dow Jones industrial average fell 69 points, or 0.4 percent, to 15,819. The Nasdaq composite was down 11 points, or 0.3 percent, at 4,035.

Earlier in the week, there were strong reports on manufacturing and construction. Investors will get more insight into how the U.S. economy is doing on Friday, when the government releases its monthly jobs report.

While few investors think that the Fed will announce that it will cut its bond purchases at its meeting this month, many believe policy makers could make the move in March next year.

Several retailers fell after reporting disappointing results. L Brands, the owner of Victoria’s Secret, Bath & Body Works and other retailers, lost 93 cents, or 1.5 percent, to $62.34 after reporting that its sales dropped 5 percent last month.

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