U.S. stocks fall after disappointing Alcoa results, rising deficit

08:28, January 13, 2010      

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U.S. stocks retreated Tuesday, with S&P falling for the first time in 2010, as disappointing Alcoa fourth-quarter results and rising U.S. trade deficit cooled optimism for a strong earnings season and a sustainable economic recovery.

U.S. stocks were broadly lower, with energy, retail and semiconductor sectors taking the lead.

Dow industrials component and the world's largest aluminum producer Alcoa slumped more than 11 percent, the most since March, as the company posted a quarterly net loss of 277 million U.S. dollars, worse than market expectation.

Main averages were also under pressure after the Commerce Department reported the U.S. trade deficit widened more than expected in November. According to the report, U.S. deficit in international trade of goods and services expanded 9.7 percent to 36.40 billion dollars from a revised 33.2 billion dollars in October.

Global markets took a hit after China's central bank said Tuesday it will raise the reserve requirement ratio by 0.5 percentage point, in an attempt to cool the world's fastest-growing major economy.

Crude tumbled the most in five weeks on concern demand from China, the world's second-largest oil consuming country, will wane as the government moves to curb lending. Benchmark crude for February delivery fell 1.73 dollars to settle at 80.79 dollars a barrel on the New York Mercantile Exchange. It's the first time this year a barrel has closed below 81 dollars a barrel.

Chevron, the second largest U.S. oil company fell 1 percent and pressured fellow Dow oil component Exxon Mobil as the company warned late Monday that sharply lower fourth-quarter refining earnings would drag down its fourth-quarter results.

At Tuesday's close, the Dow Jones lost 36.73, or 0.34 percent, to 10,627.26. Broader indexes also ended in negative territory. The Standard & Poor's 500 index fell 10.76, or 0.94 percent, to 1,136.22 and the Nasdaq dropped 30.10, or 1.30 percent, to 2,282.31.

Source: Xinhua
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