Investors approached the current week prepared to book profits from a rally last week that raised stocks to their highest level since September 2008, prior to the collapse of Lehman Brothers. The greenback, which has lately developed an inverse relationship with the stock market, fell to a multi-period low.
On Tuesday, stocks fell for the second straight day, led by losses in banking and metal sectors. Negative triggers included a decline in the euro, due to fresh worries about Ireland, and a late-session drop in the Treasury market.
The Dow Jones Industrial Average dropped 60 points, or 0.53%, to about 11,347 with 22 out of its 30 components in the red. The Standard & Poor’s 500 Index slipped almost 10 points, or 0.8%, to 1,213 with financial stocks a laggard. The Nasdaq lost ground by 17 points, or 0.66%, to close at 2,563. For every stock that moved up, nearly three declined on the NYSE, where a total of 1.1 billion stocks were traded.
The Federal Reserve’s announcement to inject as much as $600 billion into the economy, through a series of Treasury purchases, is widely expected to weaken the dollar and benefit exporters such as Caterpillar (NYSE:CAT). However, the Fed’s decision has attracted criticism overseas and it is expected to be a major topic at a meeting of 20 finance ministers (Group of 20) to start in South Korea from Thursday.
On the acquisition front, Chevron (NYSE:CVX) will purchase natural gas producer Atlas Energy (Nasdaq:ATLS) for $3.2 billion. Shares of Yahoo! Inc. (Nasdaq:YHOO) moved up about 3.2% on news that it may be a takeout target.
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