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MENAFN - ProactiveInvestors - Australia - 11/10/2012

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Weak corporate news was a catalyst in a sell-off in U.S. stocks overnight, after aluminum producer Alcoa cut its global demand outlook and Chevron Corp. warned of lower earnings. The Fed said that the U.S. economy expanded "modestly" last month.
(MENAFN - ProactiveInvestors - Australia) U.S. stocks continued to fall throughout the trading session on Wall Street overnight - with the major indices closing at or near the low of the day.

Some profit taking was going to happen after such a strong run this year.

By the close the Dow Jones had lost 129 points (-0.95%) to 13,345, while the NASDAQ fell 13 points (-0.43%) to 3052.

Driving stocks lower was some corporate news, with aluminum producer Alcoa (NYSE:AA) cutting its global demand outlook and Chevron Corp. (NYSE:CVX) warned of lower earnings.

U.S. Economy Expands

The Federal Reserve said that the U.S. economy was expanded "modestly" last month, supported by improvements in housing and auto sales, even as the labor market showed little change.

"Consumer spending was generally reported to be flat to up slightly since the last report," the U.S. central bank said in its Beige Book business survey, based on accounts from the 12 district Fed banks.

Conditions in manufacturing were "somewhat improved" the Fed said in its report.

U.S. Corporate News

In corporate news, Chevron shares sank after the oil company said its third-quarter earnings will be "substantially lower" than second quarter results.

Late Tuesday, Alcoa kicked off earnings season with a third-quarter loss as costs related to legal settlements weighed, though adjusted earnings and revenue beat analyst expectations.

Food chain operator Yum! Brands (NYSE:YUM) said late yesterday that fiscal third quarter earnings surged 22.9% thanks to rising revenue and same-store sales in China and the U.S.

Shares of gas engine manufacturer Cummins (NYSE:CMI) fell on news that the company would fire 1,000 to 1,500 employees to deal with a weakening global economy.

On the economic front, inventories in August rose 0.5%, which is the first time since April that the rise in sales exceeded the rise in inventories. The consensus estimate was for a 0.4% rise, according to Bloomberg.

A burst of sales brought down inventories relative to sales in the wholesale sector during August. Sales in the sector, showing wide strength and including special strength for autos, jumped 0.9% for the strongest increase since February.


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