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    U.S. stocks declined as investors questioned if the market had overestimated the impact of the Federal Reserve's stimulus plans and worries remained about European sovereign debt. The Dow fell 54 points as Boeing and McDonald's shares dropped. Traders watched currencies closely as tensions grew between Germany and the U.S. over trade balances ahead of an economic summit. Meanwhile, concerns about debt in Ireland, Portugal and Spain resurfaced, causing their borrowing costs to rise.

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    U.S. stocks declined as investors questioned if the market had overestimated the impact of the Federal Reserve's stimulus plans and worries remained about European sovereign debt. The Dow fell 54 points as Boeing and McDonald's shares dropped. Traders watched currencies closely as tensions grew between Germany and the U.S. over trade balances ahead of an economic summit. Meanwhile, concerns about debt in Ireland, Portugal and Spain resurfaced, causing their borrowing costs to rise.

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    U.S. stocks declined as investors questioned if the market had overestimated the impact of the Federal Reserve's stimulus plans and worries remained about European sovereign debt. The Dow fell 54 points as Boeing and McDonald's shares dropped. Traders watched currencies closely as tensions grew between Germany and the U.S. over trade balances ahead of an economic summit. Meanwhile, concerns about debt in Ireland, Portugal and Spain resurfaced, causing their borrowing costs to rise.

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    11 views2 pages

    Article

    Uploaded by

    Laura Iacob
    U.S. stocks declined as investors questioned if the market had overestimated the impact of the Federal Reserve's stimulus plans and worries remained about European sovereign debt. The Dow fell 54 points as Boeing and McDonald's shares dropped. Traders watched currencies closely as tensions grew between Germany and the U.S. over trade balances ahead of an economic summit. Meanwhile, concerns about debt in Ireland, Portugal and Spain resurfaced, causing their borrowing costs to rise.

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    of 2

    U.S.

    Stocks Slip As Investors Reassess Recent Gains


    By DONNA KARDOS YESALAVICH

    NEW YORK—U.S. stocks declined Monday as investors questioned whether the market might
    have overly priced in the Federal Reserve's stimulus plans in recent weeks, especially as worries
    remain over the financial health of some euro-zone members.

    The Dow Jones Industrial Average dropped 54 points, or 0.5%, to 11391. Boeing was the
    measure's worst performer with a drop of 1.8%, after Aviation Week on Friday reported that the
    company has told several of its early customers that delivery of the 787 Dreamliner will be
    delayed by as long as 10 months.

    McDonald's was also weak, off 0.3%. The fast-food giant's same-store sales rose 6.5% in
    October from a year earlier, topping its own forecast and analysts' estimates, but investors were
    disappointed by a 5.6% increase in U.S. comparable sales, which came in short of analysts'
    forecast for a 6% gain.

    The Nasdaq Composite shed 0.1% to 2578. The Standard & Poor's 500-stock index dropped
    0.5% to 1220.

    The declines came as the market digested the Dow's 2.9% climb last week that brought the
    measure to highs not seen since prior to the September 2008 collapse of Lehman Brothers. The
    measure is up about 14% from late August, with much of the rally fueled by expectations for the
    Republican Party's win of control of the House of Representatives last week, and the Federal
    Reserve's pledge to inject more money into the economy.

    QE2 worries are replaced by renewed concerns over European sovereign debt, leading U.S.
    stocks lower. Donna Kardos Yesalavich, Kathleen Madigan and George Stahl report.

    But investors are now wondering whether the market may have overdone the impacts of the
    election and stimulus move, dubbed by Wall Street as QE2.

    There are questions of "did we go too far too fast," said Jim Meyer, chief investment officer at
    Tower Bridge Advisors. "There's a lot of questioning over whether QE2 is going to do what it's
    intended to do."

    Meanwhile, concerns about the debt situation in Ireland, Portugal and Spain resurfaced. The euro
    fell to $1.3935, compared with $1.4034 late Friday in New York, as funding costs grew for all
    three countries while the costs to insure against their debt also rose. Amid the concerns, U.S.
    shares of Bank of Ireland tumbled 6.6%.

    Also hurting the euro, German industrial production unexpectedly fell in September from the
    previous month as the economic recovery proceeded more moderately.
    As the euro weakened, the dollar strengthened. The U.S. Dollar Index, tracking the U.S. currency
    against a basket of six others, climbed 0.7%.

    Traders kept a close eye on currencies as U.S. President Barack Obama, returning fire in a heated
    exchange with Germany, added his voice to U.S. efforts to reduce massive German and Chinese
    trade surpluses and increase pressure on China to let the value of its currency rise. Tensions have
    flared between German and U.S. economic officials ahead of the summit of the Group of 20
    industrial and developing nations, which begins Wednesday night in Seoul.

    "It's not surprising," said Michael Church, president of Addison Capital. "Everyone wants to try
    to export their way to growth and the dynamics of that are that that's impossible to happen, so
    you're going to have some infighting here."

    European Central Bank President Jean-Claude Trichet tried Monday to calm the argument over
    foreign-exchange policies, dismissing suggestions that the world's major powers are deliberately
    weakening their currencies. He said central banks across the world "share a common purpose" in
    keeping inflation expectations anchored, despite the differing challenges they face in their
    respective countries.

    Demand for Treasurys fell, lifting the yield on the 10-year note up to 2.54%. Crude-oil futures
    slipped, as did gold futures.

    Among stocks in focus, Yahoo climbed 0.9% following a Wall Street Journal article saying AOL
    has hired financial advisers to explore various strategic options for the Internet company, one of
    which includes a possible tie-up with bigger rival Yahoo. AOL added 1.4%.

    http://online.wsj.com/article/SB10001424052748703514904575602073820860004.html?
    mod=WSJ_Markets_LEFTTopNewsInt

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