Rate fears keep broad market in check
One culprit for Wall Street's waning demand for
technology shares was the threat of rising U.S.
interest rates ahead. Higher rates will hurt the growth
prospects of technology companies that rely heavily
on borrowing for expansion capital, rendering the
sector less attractive to investors.
The market also shunned shares of
financial-services firms amid lingering concerns that
rising interest rates are on the way. Higher rates
would bite into demand for loans by making
borrowing more expensive, cutting into the income of
banks and other large lenders.
On the Dow, shares of American Express (AXP)
tumbled 6-13/16 to 131-3/4 and J.P. Morgan (JPM)
lost 2-3/4 to 127-7/8. Elsewhere in the sector, First
Union (FTU) , which named a replacement for its
retiring president Friday, gave up 2 to 46.
Automotive stocks drove into the red as
DaimlerChrysler (DCX) extended its slide into a
second day. The German-American carmaker
suffered three downgrades a day after reporting
disappointing second-quarter earnings, causing its
American depositary receipts to plunge 5-3/16 to
72-3/8.
Merrill Lynch cut the company's near-term
outlook to "neutral" from "buy" and Deutsche Banc
Alex. Brown lowered the stock's rating to "market
perform," also from "buy." Warburg Dillon Read
downgraded the stock to "buy" from "strong buy."
Other automakers suffered on concerns that
higher rates will make it more difficult for consumers
to obtain financing for cars and other big-ticket
purchases, in turn weakening the key domestic auto
market. Ford (F) lost 3-1/2 to 48-1/2 in parallel, while
Dow carmaker General Motors (GM) retreated
2-13/16 to 61-1/8.
Among the Dow's scattered advances, Merck
(MRK) reaped early benefits from an announcement
that the pharmaceutical firm will begin testing two
AIDS vaccines on human subjects soon, with shares
gaining 7/8 to 67-5/8. Shares of biotech firm Vical
(VICL), which is licensing technology used in one of
the vaccines to Merck, jumped 3-11/16, or more than
33 percent, to 14-3/4.
해석 할 시간이 없었어요 이해해 주세요 ^^;