21 September 2011 21:44 [Source: ICIS news]
HOUSTON (ICIS)--North American chemical stocks fell sharply in the last minutes of Wednesday's trading session as the Dow Jones Industrial Average dropped by nearly 284 points.
The index closed at 11,124.84, down 2.49%.
The decline followed an announcement from the Federal Reserve Board, which said it would take steps designed to lower long-term US interest rates.
Over the next 15 months it would purchase $400bn (€292bn) worth of US Treasury long-term securities, ranging from six-year to 30-year maturities, while at the same time selling an equal amount of its current holdings of short-term Treasuries, those with maturities of three years or less.
In announcing its plan to buy-down interest rates on long-term Treasuries, the Fed said that it was acting because US economic growth remains slow, citing continuing weakness in the labour market, the high unemployment rate and the ongoing depression in the housing sector.
Stock markets plunged after the announcement, with chemical stocks performing worse.
The Dow Jones US Chemicals Index fell by 4.75%. Nearly every company followed by ICIS fell.
The biggest loser was specialty chemicals producer Ferro, which fell by 12%. Several companies fell by more than 7%, including acetyls producer Celanese, refiner and polypropylene (PP) producer LyondellBasell, butadiene (BD) producer TPC Group, specialty chemicals producer Chemtura and carbon-black producer Cabot.
Biocides producer Arch Chemicals was the only winner, rising by 0.06%. However, an acquisition offer from Lonza, a Switzerland-based fine and specialty chemical producer, is supporting Arch's share price.
Among the majors, Dow Chemical fell by 6%, and DuPont dropped by 3%.
Fertilizer producer PotashCorp and industrial gasses producer Praxair both fell by 4%.
($1 = €0.73)
Additional reporting by Joe Kamalick
Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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