Wall Street lower on weak investor sentiment

Dow Jones:12,239.89 (+6.74) S&P 500:1,320.88 (–3.69) Nasdaq:2,789.07 (–7.98)

MOST US stocks fell, pushing the Standard and Poor’s 500 Index down yesterday, from its highest level since June 2008, amid growing investor concern that accelerating global inflation will lead to higher borrowing costs.

Walt Disney’s gain accounted for more than 16 positive points for the gauge.

“Inflation is picking up around the world as there is leakage from the quantitative easing policy in the US to the commodities space and to China,” said Stephen Wood, the New York-based chief market strategist for Russell Investments.

The Dow Jones industrial average was up 6.74 points, or 0.06 per cent, at 12,239.89.

The Standard & Poor’s 500 Index was down 3.69 points, or 0.28 per cent, at 1,320.88.

The Nasdaq Composite Index was down 7.98 points, or 0.29 per cent, at 2,789.07.

Federal Reserve chairman Ben Bernanke said the economic recovery has strengthened while unemployment will remain high “for some time”. His comments back speculation the Fed is waiting for further proof of a durable pickup in the job market as it presses ahead with its quantitative easing plan.

Chevron dropped 1.5 per cent to $96.24. Alcoa slid 1.4 per cent to $17.16.

Stocks extended losses earlier yesterday after Ireland’s finance ministr said it will postpone capital injections into banks until after the country’s election.

Banks had the biggest decline in the SP 500 within 24 industries, falling 1.7 per cent.

Wells Fargo dropped 2.8 per cent to $33.13. CFO Atkins resigned for personal reasons, taking an unpaid leave of absence, and will be replaced by CAO Timothy J Sloan.

AIG fell 3 per cent to $41.11 after saying that higher- than-forecast claims costs cut fourth-quarter profit by $4.1 billion, and $2 billion previously designated to repay its bailout will be used to bolster the property-casualty unit.

Walt Disney rose 5.3 per cent, the most in the Dow average, to $43.36. The media company said first-quarter profit rose 54 per cent, beating estimates, after an increase in attendance at its theme parks and advertising sales growth at the ESPN sports channel. Sales rose 10 per cent to $10.7 billion, also topping estimates. – (Bloomberg/Reuters)