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Wall Street heads for another weekly loss after emerging market asset selloff

January 24, 2014

U.S. stock markets opened lower Friday, on the back of a major sell-off in emerging market assets, ahead of a meeting by the Federal Reserve that could see another trim in stimulus measures next week. With market consensus showing that the Fed will cut its stimulus by another $10 billion a month next week, investors will look to less risky assets such as U.S. bonds, expecting interest rates will begin to rise. The Fed`s policymakers will conclude a two-day meeting on Wednesday. The 10-year U.S. Treasury yield rose above 2.75 percent after earlier falling to a two-month low. A rout in emerging market assets spread to developed countries in Europe on worries over Fed policy, slowing growth in China and political problems in Turkey , Argentina and Ukraine . The Turkish lira hit a fresh record low and the South African rand hit a new five-year low against the dollar. U.S.-listed shares of Banco Bilbao Vizcaya Argentaria, S.A. fell 3 percent to $12.30 in premarket trading a day after the country`s peso currency suffered its steepest daily decline in 12 years . Argentina`s government said Friday it would loosen strict foreign exchange controls, after it abandoned its long-standing policy of supporting the peso currency by intervening in the foreign exchange market earlier this week. That resulted in the currency`s steepest plunge since the 2002 financial crisis. -The Dow Jones Industrial Average fell 0.57% to 16105.36 -The S&P 500 Index fell 0.68% to 1816.00 -The NASDAQ Composit e fell 0.78% to 4185.57 . As of 10:00 a.m. ET Corporate earnings Procter & Gamble Co gained 0.5 percent to $78.60 in premarket after the world`s largest household products maker, reported lower quarterly profit on Friday but kept its 2014 sales forecast unchanged. Microsoft Corp gained 3.2 percent to $37.20 before the opening bell after the world`s largest software company posted a bigger-than-expected quarterly profit. Honeywell International Inc reported higher-than-expected fourth-quarter profit and revenue on Friday, as sales grew across the diversified manufacturer`s major segments. However, its shares slipped 0.2 percent to $89.60 in premarket.

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Source: Financial Markets

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