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Wall Street Worried Rising Interest Rates The Fed

Jakarta (Benchmark News) – Wall Street ended little changed on Monday (14/12/2016) after rising dramatically the previous week, due to a decline in the technology sector offset the sharp increase in the financial sector after investors speculated to higher interest rates.

After fluctuating in the late trading session, the Dow ended at a record high of S&P, while the Nasdaq composite slumped and 500.

“I think all we do is trimming a little voyage (travel) us from a positive rally that we have from the post-election results last week,” said Mark Luschini, Chief Investment Strategist of Janney Montgomery Scott in Philadelphia.

The Nasdaq composite index of technology stocks have been under pressure since the general election of 8 November, as investors siphon money into sectors such as finance, industry and energy, which are seen benefitting from the policies of U.s. President-elect Donald Trump.

The financial index rose 2.3 percent, with banks including Bank of America, JPMorgan provides the greatest encouragement. The index has increased by 10.8 percent since the election supported deregulation and expectations of higher interest rates.

While financial rally got power S&P technology, the index closed down 1.7 percent, leading the decline. The index has fallen 3.0 percent since the election.

Apple fell 2.5 percent, Nasdaq as well as the most burdensome S&P 500, followed by Facebook and Microsoft.

Since valuation technology has surged in the last few years, investors shifted their money to sectors such as banks, the relatively cheaper but now will benefit from rising interest rates, said Kim Forrest, equity research senior analyst at Fort Pitt Capital Group in Pittsburgh.

Investors had expected the technology sector will look relatively less attractive if Trump carry out his promise to review regulation in the health care and financial sectors as well as increasing government spending on infrastructure to encourage economic growth.

“If growth becomes larger, we can see the continuation of the rotation down valuations, business is more cyclical creation raises and out of growth stocks with high valuations like technology,” said James Abate, head of investment at the Centre Asset Management in New York.

Dow Jones Industrial Average closed up 21.03 points or 0.11 percent to 18,868.69, the index S&P 500 lost 0.25 points or 0.01 per cent to 2,164.2 and the Nasdaq composite index was down 18.72 points or 0.36 per cent to 5,218.40.

The US Federal Reserve is widely predicted to increase interest rates at a meeting of December, with traders predicting in a 91 percent chance, according to CME Group FedWatch tool.

The industrial index closed up 0.4 percent, buoyed by the prospect of increased spending on infrastructure.

Harman International rose 25.2 percent to 109.72 u.s. dollars after Samsung Electronics announced an eight billion u.s. dollars deal to buy the company.

Rising stocks outweighed a decline, with a constellation of 1.10 against 1 on the NYSE and on Nasdaq 1.44 against 1.

S&P 500 index recorded a new high of 82 in the 52-week and three-position new lows; the Nasdaq composite recorded a new high of 423 and 31 new lows.

About 10 billion shares changed hands on U.S. exchanges on Monday, far above the average of 7.7 billion us for the previous session….(Red)

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