Indexes slip after warning on China stocks
NEW YORK (Reuters) - U.S. stocks edged lower on Wednesday as a warning about Chinese stocks by former Federal Reserve Chairman Alan Greenspan erased gains fueled by takeover talk in the aluminum sector.
Greenspan said he feared a "dramatic contraction" in Chinese stocks after the recent boom, adding the run-up was "clearly unsustainable." ID:nMDT004118
The comments come almost three months after a sharp drop in Chinese stocks on concerns about speculative investments triggered a global equity rout.
Shares of Alcoa (AA.N), the world's largest aluminum company, rose to their highest in more than five years after Canada's Alcan AL.TO AL.N said it was in discussions with third parties, following its rejection of U.S. rival Alcoa's bid on Tuesday.
"There were some comments about the bubble in China and that reversed our market. The last big sell-off was China- driven, so Greenspan's comments got people to be a little bit more aggressive on the sell side," said Bobby Harrington, head of block origination at UBS in Stamford, Connecticut.
"People are looking for a reason for the market to take a rest, but there are still some pretty strong money flow trends, with what is going on with private equity."
The Dow Jones industrial average .DJI fell 14.30 points, or 0.11 percent, to end at 13,525.65, after earlier hitting a record.
The Standard & Poor's 500 Index .SPX slipped 1.84 points, or 0.12 percent, to finish at 1,522.28. The Nasdaq Composite Index .IXIC dropped 10.97 points, or 0.42 percent, to close at 2,577.05.
After the closing bell, Network Appliance Inc. (NTAP.O), a maker of data network storage gear, plunged 15.7 percent following the company's forecast that it sees fiscal first-quarter revenue down sequentially. The stock slid to $32.05 in electronic trading after closing on the Nasdaq at $38.06.
S&P 500 MISSES RECORD AGAIN
In Wednesday's regular session, the S&P 500 once again crossed its 1,527.46 record closing level but failed to hold on to its gains to the end of the day. The S&P 500 reached its record close on March 24, 2000, in the last throes of the dot-com bubble.
A steady stream of takeovers, record share buybacks and stronger-than-expected earnings have helped push the Dow to record after record in recent weeks and put the S&P 500 within reach of the closing high.
Target, the No. 2 U.S. discount chain, reported stronger-than-expected quarterly earnings, which helped lift the lagging retail sector. The S&P Retail index .RLX has gained just a little more than 5 percent since March 14, when the market hit its low for the year, versus a rebound of more than 10 percent by the S&P 500.
The retail index advanced 0.12 percent on Wednesday.
Target's stock rose almost 1 percent to $58.60 on the New York Stock Exchange. Continued...
