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Wall St lower on Alcoa, Chevron warnings

Oct 11 2012 07:57
AFP

New York - US stocks closed lower on Wednesday amid investor caution after Alcoa said that China's economic slowdown was hitting aluminum consumption and Chevron slashed its earnings outlook.

Shares took little notice of the improved view of the US economy from the Federal Reserve's regional "Beige Book" survey.

At the close the Dow Jones Industrial Average was down 128.56 points, at 13,344.97.

The S&P 500 dropped 8.92 to 1,432.56, while the tech-rich Nasdaq gave up 13.24 points to 3,051.78.

Alcoa, down 4.6%, and oil giant Chevron, down 4.2%, dragged the Dow blue chips lower.

Alcoa turned in a $143m third-quarter loss following the close of trade Tuesday, though most of that was due to settling environmental and legal claims rather than operational losses.

The company cut its forecast for the growth of global aluminum demand to six percent from seven percent, citing specifically China's slowdown.

Chevron meanwhile said its third-quarter earnings would be significantly lower than forecast, citing lower production and foreign exchange losses.

Yum Brands, the owner of fast-food chains Kentucky Fried Chicken, Pizza Hut and Taco Bell, gained 8.0% after raising its earnings forecast.

And Walmart, the US retailing titan, gained 1.7% after detailing a moderately aggressive expansion plan and expressed confidence in the imminent holiday shopping season.

The company's managers "are optimistic about the second half of the year and keeping the momentum going through the holidays," said chief executive Mike Duke.

Major markets worldwide were lower on concerns that the world's economy was frail and vulnerable to more turbulence.

"Global growth fears were once again the story as investors sold shares in response to the International Monetary Fund downgrading its forecast. The Fund now predicts the slowest global growth in three years," said Briefing.com.

US bond prices pushed higher. The 10-year Treasury yield fell to 1.68% from 1.7% on Tuesday, while the 30-year yield dropped to 2.88% from 2.94%.


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