Stocks dropped Tuesday after comments by a Federal Reserve official about inflation signaled more interest rate increases in the near future.
The Dow Jones Industrial Average fell 94.37, or 0.9 percent, to 10,441.11. The Standard & Poor’s 500 Index lost 12.23, or 1 percent, to 1,214.47. The Nasdaq Composite Index dropped 16.07, or 0.8 percent, to 2,139.36.
Dallas Federal Reserve Bank President Richard Fisher told the Greater Dallas Chamber of Commerce that inflation was running at the upper end of the Fed’s tolerance zone and that the U.S. needs to be “especially vigilant on that front” a signal the Fed will continue raising interest rates.
Shares of homebuilders slid after The New York Times reported that executives at the 10 largest U.S. companies in the industry sold almost 11 million shares valued at $952 million so far this year, up from 6.8 million shares valued at $658 million in all of 2004. KB Home fell 3.9 percent to $70.41 and Ryland Group Inc. sunk 4.8 percent to $66.05 on the news. Further bad news for the sector came from Brookfield Homes, who said on Tuesday that its net new orders for the three months ended Sept. 30 fell to 246 units from 301 a year earlier.
Among other local companies, DaVita Inc. gained 4.6 percent to $50.40 after the El Segundo-based dialysis services provider said the Federal Trade Commission will require it to divest 70 of its 706 outpatient facilities as a condition for approval of its $3.1 billion acquisition of the U.S. health-care unit of Sweden’s Gambro AB. DaVita expects the acquisition to close this month.
IRIS International Inc. rose 10.4 percent to $20.97 after the Chatsworth-based in vitro diagnostics manufacturer said it secured a third purchasing agreement to sell urine analyzers to the U.S. Department of Veterans Affairs. The company said it received a five-year purchasing agreement with the Veterans Integrated Services Network’s VISN 16 region of the Department of Veterans Affairs for an order of 23 urine analyzers for the agency’s health care centers. Financial details of the order were not disclosed.
And shares of Jacobs Engineering Group Inc. slipped 4.8 percent to $64.76 after the Pasadena-based engineering firm’s stock rating was downgraded to “market perform” from “outperform” by analyst Alex Rygiel at Friedman, Billings, Ramsey & Co.
