The Clinton Herald, Clinton, Iowa

October 10, 2013

Stock slumps slows in early trading

STEVE ROTHWELL Markets Writer
The Clinton Herald

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NEW YORK (AP) — A decline this week on the major U.S. averages paused as the White House prepared to nominate Janet Yellen for the top position at the Federal Reserve.

Investors expect Yellen, who currently serves as the Fed’s vice chair, to continue the aggressive economic policies championed by Chairman Ben Bernanke. President Barack Obama is scheduled to announce the appointment at the White House with Yellen and Bernanke at his side Wednesday.

Markets slumped in late September as lawmakers clashed over raising the nation’s debt limit and as a partial government shutdown leeched into October. The Standard & Poor’s 500 index has fallen 4 percent since hitting a record high in mid-September.

Yellen’s appointment “does add certainty, in the absence of certainty for stocks,” said Jim Russell, a regional investment director at U.S. Bank. “It perhaps keeps a little bit of a safety net under equities for the near, or intermittent, term.”

The S&P 500 index climbed one point, or 0.1 percent, to 1,656. The index lost 2 percent in the first two days of trading this week amid growing concern that politicians will fail to reach a deal before the Treasury runs out of money to pay its bills on Oct. 17.

The Dow Jones industrial average rose 8 points, or 0.1 percent, to 14,785.32 in early trading. The Nasdaq rose 16 points, or 0.4 percent, to 3,677.

Investors are also getting a glimpse at the health of corporate America as third-quarter earnings begin to roll out. So far, it’s a mixed bag.

Alcoa rose 31 cents, or 3.9 percent, to $8.25 after the aluminum maker posted a slim third-quarter profit late Wednesday, reversing a year-ago loss.

Yum Brands, which owns KFC, Taco Bell and Pizza Hut fell $5.79, or 8.1 percent, to $65.53 after falling short of Wall Street expectations. Sales in China have grown weaker and the company cut its full-year earnings forecast after the closing bell Wednesday.

Costco also fell short of expectations and shares slipped Wednesday.

In government bond trading, the yield on the 10-year Treasury note rose to 2.64 percent from 2.63 percent.

In commodities, trading the price of oil dropped $1.26, or 1.2 percent, to $102.23. Gold slumped $29.30, or 2.2 percent, an ounce to $1,296.20 an ounce.

Among stocks making big moves:

— Jos. A. Bank Clothiers rose $3, or 7.2 percent, to $44.72 after saying it wants to buy rival retailer Men’s Wearhouse for $2.3 billion. Men’s Wearhouse rose $8.54, or 24 percent, to $43.83.