Stocks fall; Dow in red for the year

Los Angeles Times - - TECHNOLOGY - As­so­ci­ated press

The Dow Jones industrial av­er­age slipped into the red for the year Mon­day as stocks ex­tended their slump.

Air­lines were among the big­gest losers amid con­cern that ca­pac­ity growth in the in­dus­try may curb prof­itabil­ity. JetBlue Air­ways, Amer­i­can Air­lines and Delta Air Lines were among the car­ri­ers that de­clined.

Stocks have sagged in the last two weeks as in­vestors try to as­sess whether Fed­eral Re­serve pol­i­cy­mak­ers will raise their bench­mark in­ter­est rate later this year for the first time since the re­ces­sion. A stronger-thanfore­cast jobs re­port Fri­day sug­gested that the econ­omy is re­cov­er­ing from its win­ter slump.

The Fed has kept its bench­mark in­ter­est rate un­changed at close to zero for more than six years to help sup­port lend­ing and boost the econ­omy. Those low rates have also boosted the stock mar­ket in that time, push­ing it to record lev­els.

“The mar­ket is sug­gest­ing that if the data con­tinue at this pace, the Fed will be more in­clined to raise rates in Septem­ber, rather than wait­ing,” said Quincy Krosby, a mar­ket strate­gist at Pru­den­tial Fi­nan­cial.

The Stan­dard & Poor’s 500 in­dex dropped 13.55 points, or 0.7%, to 2,079.28. The Dow fell 82.91 points, or 0.5%, to 17,766.55, giv­ing it a loss of 0.3% for 2015.

The Nas­daq com­pos­ite de­clined 46.83 points, or 0.9%, to 5,021.63.

On Mon­day, air­line stocks were among the big­gest de­clin­ers as in­dus­try ex­ec­u­tives met in Miami for the In­ter­na­tional Air Trans­porta­tion group’s an­nual gen­eral meet­ing.

Amer­i­can Air­lines Chief Ex­ec­u­tive Doug Parker said he was wor­ried that growth in air­line ca­pac­ity could de­press prof­its.

An­a­lysts at Ray­mond James cut their earn­ings fore­casts for Amer­i­can Air­lines, Delta Air Lines and United Con­ti­nen­tal.

Amer­i­can Air­lines was among the lead­ing de­clin­ers in the S&P 500, drop­ping $1.86, or 4.5%, to $39.86. Delta Air Lines, United, South­west Air­lines and JetBlue also fell.

In en­ergy trad­ing, the price of oil fell as im­port data sug­gested a slow­down in Chi­nese trade, which could lead to weaker global de­mand for diesel, gaso­line and other fu­els.

Bench­mark U.S. crude fell 99 cents to close at $58.14 a bar­rel in New York. Brent crude, a bench­mark for in­ter­na­tional oil used by many U.S. re­finer­ies, fell 62 cents to close at $62.69 in Lon­don

In U.S. gov­ern­ment bond trad­ing, prices rose. The yield on the 10-year note fell to 2.38%. The yield had risen to its high­est level of the year Fri­day. The dollar slipped to 124.42 yen from 125.61 yen Fri­day. The euro strength­ened to $1.1298 from $1.1113.

Gold rose $5.50, or 0.5%, to $1,173.60 an ounce.

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