TODAY'S PAPER
48° Good Evening
48° Good Evening
Business

Stocks retreat; gold hits record above $1,400

Stocks pulled back Monday as traders retreated from a rally that brought indexes to their highest levels since the peak of the financial crisis in September 2008.

Gold crossed $1,400 an ounce Monday, closing at $1402.80, another record.

The Dow Jones industrial average fell 37.24 points, or 0.3 percent, to close at 11,406.84. It surged 2.9 percent last week after the Federal Reserve announced a $600 billion stimulus package for the U.S. economy.

The Standard and Poor's 500 index fell 2.60, or 0.2 percent, to 1,223.25. The Nasdaq composite index edged up 1.07, or 0.04 percent, to 2,580.05.

Stocks have risen in recent weeks on better-than-expected corporate earnings reports and the introduction of a bond-buying program by the Federal Reserve that is intended to stimulate the economy by driving interest rates lower and encouraging spending.

The dollar rose 0.5 percent against a broad basket of currencies. The euro fell 0.8 percent from recent highs, in part on renewed concerns about the debt burdens of the weaker economies among countries that use the Euro.

Prices for Treasury bonds fell. The yield on the 10-year Treasury bond rose slightly to 2.57 percent, from 2.53 percent late Friday.

St. Louis Fed President James Bullard Monday defended the central bank's stimulus program in a meeting at the New York Society of Security Analysts. Bullard said that the pace of economic recovery had slowed, which made deflation, rather than inflation, a greater concern for the Fed.

"U.S. policy should strive to avoid the possiblity of a Japanese-style deflation," he said.

Japan's economy has stalled since its stock market peaked in the early 1990s. In deflation, banks curtail lending, consumers drastically cut back on spending and corporations hoard cash out of fear that prices will continue to fall.- AP

Comments

We're revamping our Comments section. Learn more and share your input.

More news