U.S. stocks dropped,
with the Standard & Poor’s 500 Index falling to its lowest level
since Aug. 25, as the rout in oil persisted and data showing falling
retail sales rekindled concern about the health of the economy.
The S&P 500 pared
earlier losses that sent it 3.3 percent lower, as technology and energy
stocks led losses. Goldman Sachs Group Inc. fell 3.6 percent after
agreeing to settle a U.S. probe into its handling of mortgage-backed
securities, a move that will cut its fourth-quarter profit by about $1.5
billion. Citigroup Inc. and Wells Fargo & Co. lost at least 3.6
percent even after reporting quarterly earnings that topped projections.
Wal-Mart Stores Inc. dropped 1.8 percent after saying it plans to close
269 stores.
The worst start to a
year in U.S. equities on record has left them trading at the most
attractive level versus bonds in a year based on one valuation measure.
Dividend yields in the S&P 500 have climbed 30 basis points above
the yield offered by 10-year Treasuries, a reversal from just last week
when the payout from bonds was higher. The S&P 500’s multiple based
on profits is also at a cheaper level. The gauge is trading at 16.8
times reported profits, a 8.6 percent discount to its average multiple
over the last year.
The S&P 500
dropped 2.2 percent to 1,880.27 at 4 p.m. in New York, after earlier
falling as much as 3.3 percent to the lowest level since April 2014.
Volume on U.S. exchanges was 43 percent higher than the three-month
average. The Dow Jones Industrial Average slid 391 points, or 2.4
percent, to 15,988.08, while the Nasdaq Composite index dropped to its
lowest since October 2014.
Source: Bloomberg
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