Stocks tumble as dollar jumps
Source: | Filed in
Currencies | 
Subscribe to Savvy Investor via RSS
1/21/10NEW YORK (CNNMoney.com) – Stocks tumbled Thursday as a strong dollar and concerns about China’s bank lending practices zapped commodity prices and shares, sparking a broader selloff.
Investors also considered the latest jobless claims report and Goldman Sachs’ better-than-expected profit report.
FacebookDiggTwitterBuzz Up!EmailPrintComment on this story
Quick Vote
Will you be looking for a new job this year?
Yes, I don’t love my current job.
Yes, I’m unemployed.
No, I’m happy where I am.
or View results
The Dow Jones industrial average (INDU) fell 133 points, or 1.3%, almost 90 minutes into the session. The S&P 500 index (SPX) fell 12 points, or 1%. The Nasdaq composite (COMP) lost 13 points, or 0.6%.
Stocks fell Wednesday as a strong dollar and questions about China’s lending practices hit commodities, and IBM’s outlook failed to impress investors. Worries about China remained in place Thursday.
Reports Wednesday said China has asked banks to slow the pace of lending this year in an attempt to get ahead of inflation.
Results: Goldman Sachs (GS, Fortune 500) said it earned $8.20 a share in the fourth quarter, trouncing forecasts for a profit of $5.20 per share, thanks to strong gains in its investment unit. Goldman also reported full-year 2009 revenue that doubled from a year ago.
The company also attempted to address criticism of its pay packages one year after accepting government money at the height of the financial crisis. Goldman paid its employees $16.2 billion in salaries and bonuses last year, up almost 50% from 2008, but still less than what had been expected.
Goldman shares were little changed, but other financial shares fell, including Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), American Express (AXP, Fortune 500) and Morgan Stanley (MS, Fortune 500).
Starbucks (SBUX, Fortune 500) reported higher quarterly sales and earnings that topped estimates in a report released late Wednesday. The coffee chain’s results were driven by growth at stores open a year or more, a retail metric known as same-store sales.
Economic news: The number of Americans filing new claims for unemployment rose to 482,000 from 446,000 in the prior week. Economists surveyed by Briefing.com thought claims would fall to 440,000.
Best Companies to Work For
Continuing claims, a measure of Americans who have been receiving benefits for a week or more, fell to 4,599,000 from 4,617,000 in the previous week. Economists expected 4,598,000 claims, on average.
The Philadelphia Fed, a regional reading on manufacturing, fell to 15.2 in January from 22.5 in December versus forecasts for a drop to 18.
World markets: Asian markets ended lower, with the exception of the Japanese Nikkei. European markets gained in late trading.
Commodities and the dollar: The dollar gained versus the euro and the yen, pressuring dollar-traded commodities.
Commodities were also under pressure because of China’s curbs, with China being a big buyer of commodities.
COMEX gold for February delivery fell $16 to $1,096.60 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.
U.S. light crude oil for February delivery slipped $1.27 to $78.05 a barrel on the New York Mercantile Exchange.
Bonds: Treasury prices were little changed, with the yield on the 10-year note at 3.65%, unchanged from late Wednesday. Treasury prices and yields move in opposite directions.
