U.S. stocks fell, wiping out gains for the year, as the dollar strengthened to near a 12-year high versus the euro amid speculation the Federal Reserve is moving closer to raising interest rates.
Goldman Sachs Group Inc. and JPMorgan Chase & Co. lost at least 1.5 percent as financial companies in the Standard & Poor’s 500 Index led declines. United Technologies Corp., Cisco Systems Inc. and Walt Disney Co. dropped more than 1.5 percent to pace losses among the biggest companies.
The S&P 500 retreated 1.2 percent to 2,055.26 at 10:33 a.m. in New York, falling below its average price for the past 50 days for the first time since Feb. 9. The Dow lost 233.05 points, or 1.3 percent, to 17,762.67.
“A continuation of dollar strength and euro destruction is certainly raising some concerns,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. “I don’t think there was any one specific event or item that caused this, but the fact that it’s a trend that’s been going on for the last several weeks is concerning given the levels we’re at now.”
Concern the Fed may start raising interest rates this year amid a strengthening economy has weighed on equities and helped boost the dollar.
In his last speech as president of the Fed Bank of Dallas, Richard Fisher said the central bank should begin to gradually raise rates before the economy reaches full employment to avoid triggering a recession.
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