US close: Boston Fed president hints at December rate hike
US equities dropped on Monday as investors continued to digest the ramifications of Friday's stronger-than-expected jobs report.
The Dow Jones Industrial Average closed down 179.85 points (1.00%) to 17,730.48, while the S&P 500 dropped 20.62 points (0.98%) to 2,078.58 and the Nasdaq ended the day at 5,095.30 points, down 51.82 points (1.01%).
Federal Reserve Bank of Boston President Eric Rosengren said it’s now an appropriate time to consider raising interest rates, and it could be done as soon as December.
Bloomberg reported his remarks, which were prepared for a speech in Portsmouth, Rhode Island, follow encouraging US economic data along with emerging signs of risk taking by some investors.
“All future committee meetings - including December’s - could be an appropriate time for raising rates, as long as the economy continues to improve as expected,” he said.
Rosengren cited the non-farm payrolls report for October, released on Friday, which was much stronger than expected, as well as measures of retail spending signalling domestic demand is overcoming weakness abroad that hurts U.S. exporters.
The Federal Open Market Committee next meets in Washington on December 15 and 16, when it will decide on whether to raise interest rates for the first time since 2006.
"Investors will have plenty of time to mull over whether Friday’s job numbers mean that Janet Yellen will succeed in squeezing in a rate hike in 2015," said IG's senior market analyst Chris Beauchamp on the non-farm payrolls numbers.
"Market expectations and a steadily-rising US dollar certainly points to an increased chance, but with US firms still complaining about the impact of a stronger greenback and a still-shaky situation in emerging markets, the picture is not as clear-cut as last week’s figures might suggest."
In company news, Plum Creek Timber Co surged on the news that Weyerhaeuser will purchase the company to create a $23bn timber, land and forest products company.
Apache Corporation also rose amid speculation from a Bloomberg report that the Houston oil company has rejected a buyer’s offer and has hired Goldman Sachs to help fend off a possible hostile takeover.
Wynn Resorts Ltd slid due to concerns over the company's falling revenue in Macau as China cracks down on the gambling industry, resulting in much fewer tourists from the mainland.
Priceline also dragged the market down after the online travel site said it now expects fourth-quarter profit to come in much below estimates of $12.42. However, it did beat expectations in its recent quarter, boosted by record hotel room bookings.
At 2200 GMT, the Brent front-month futures contract for December delivery was down 15 cents (0.32%) to $47.27 per barrel, dipping further on the previous session’s decline, while the WTI was up 0.65% or 29 cents at $44.00 per barrel.
S&P 500 - Risers
Plum Creek Timber Co. (PCL) $47.15 +17.03%
Apache Corp. (APA) $53.35 +11.92%
Norfolk Southern Corp. (NSC) $89.25 +11.74%
Peabody Energy Corp. (BTU) $15.24 +4.46%
CSX Corp. (CSX) $28.09 +3.77%
Frontier Communications Co. (FTR) $4.81 +3.44%
Rowan Companies plc (RDC) $20.87 +2.86%
Kansas City Southern (KSU) $90.10 +2.80%
Union Pacific Corp. (UNP) $87.95 +2.29%
Quanta Services Inc. (PWR) $21.28 +2.06%
S&P 500 - Fallers
Wynn Resorts Ltd. (WYNN) $66.90 -9.58%
Priceline Group Inc (PCLN) $1,317.69 -9.12%
Macerich Co (MAC) $77.44 -7.91%
Juniper Networks Inc. (JNPR) $29.24 -7.79%
Kohls Corp. (KSS) $43.80 -5.95%
Macy's Inc. (M) $46.04 -5.84%
Alcoa Inc. (AA) $8.62 -5.17%
Nordstrom Inc. (JWN) $62.74 -4.65%
FLIR Systems Inc. (FLIR) $26.55 -3.73%
PACCAR Inc. (PCAR) $51.95 -3.71%
Dow Jones I.A - Risers
Walt Disney Co. (DIS) $116.21 +0.46%
E.I. du Pont de Nemours and Co. (DD) $66.33 +0.33%
Dow Jones I.A - Fallers
Exxon Mobil Corp. (XOM) $82.25 -2.63%
Caterpillar Inc. (CAT) $72.16 -2.27%
International Business Machines Corp. (IBM) $135.28 -2.15%
Microsoft Corp. (MSFT) $53.76 -2.11%
Intel Corp. (INTC) $33.16 -2.01%
Home Depot Inc. (HD) $124.05 -1.53%
Chevron Corp. (CVX) $92.59 -1.53%
Cisco Systems Inc. (CSCO) $28.01 -1.53%
JP Morgan Chase & Co. (JPM) $67.46 -1.46%
Pfizer Inc. (PFE) $33.48 -1.33%
Nasdaq 100 - Risers
Incyte Corp. (INCY) $105.69 +5.47%
Vertex Pharmaceuticals Inc. (VRTX) $118.70 +0.63%
Mylan Inc. (MYL) $45.16 +0.44%
Nxp Semiconductors Nv (NXPI) $81.08 +0.24%
Viacom Inc. Class B (VIAB) $47.81 +0.21%
KLA-Tencor Corp. (KLAC) $66.90 +0.07%
Sirius XM Holdings Inc (SIRI) $4.10 +0.00%
Nasdaq 100 - Fallers
Wynn Resorts Ltd. (WYNN) $66.90 -9.58%
Priceline Group Inc (PCLN) $1,317.69 -9.12%
Vimpelcom Ltd Ads (VIP) $3.32 -5.68%
PACCAR Inc. (PCAR) $51.95 -3.71%
JD.com, Inc. (JD) $28.64 -3.59%
Baidu Inc. (BIDU) $193.26 -3.51%
Netflix Inc. (NFLX) $110.10 -3.47%
Biomarin Pharmaceutical Inc. (BMRN) $111.00 -3.41%
Ross Stores Inc. (ROST) $49.00 -2.78%
Avago Technologies Ltd. (AVGO) $126.08 -2.77%