U.S. stocks fell Thursday, led by Exxon Mobil after its earnings fell short of Wall Street's expectations and as disappointing economic data revived fears of a U.S. recession.
Even with Thursday's decline, the Dow and the Nasdaq finished the month higher, aided by the worst month for oil since December 2004. The S&P 500 finished the month down 1 percent.
Exxon Mobil Corp's profit miss, coupled with a 2 percent slide in the price of oil, drove the energy giant's stock down nearly 5 percent. An index of energy shares fell 2.7 percent.
Government reports showing weaker-than-expected second-quarter growth and a rise in the number of Americans applying for jobless benefits soured market sentiment and left investors uneasy about the July payrolls report due Friday.
Investors also unloaded shares of big manufacturers, including Caterpillar Inc, down 3.5 percent, and Boeing Co, off 4.3 percent.
"Investors are on edge," said Alan Lancz, president of Alan B. Lancz & Associates Inc., an investment advisory firm, based in Toledo, Ohio. "This morning's economic numbers were disappointing. Unemployment is a concern."
The Dow Jones industrial average tumbled 205.67 points, or 1.78 percent, to 11,378.02. The Standard & Poor's 500 Index dropped 16.88 points, or 1.31 percent, to 1,267.38. The Nasdaq Composite Index slipped 4.17 points, or 0.18 percent, to 2,325.55.
For the month, the Dow was up 0.25 percent, while the Nasdaq finished July up 1.42 percent. The S&P 500 lost 1 percent in July.
The Nasdaq's losses on Thursday were limited by Bristol-Myers Squibb Co's offer to buy out the remaining stake in biotech partner ImClone. Shares of ImClone notched their biggest one-day advance in 13 years -- up 37.7 percent at $63.93.
But on the New York Stock Exchange, Exxon Mobil's shares slid 4.7 percent to $80.43, while those of Caterpillar, the maker of excavators and bulldozers, fell 3.5 percent to $69.52. Boeing shares fell 4.3 percent to $61.11.
Shares of ConocoPhillips and Chevron fell more than 3 percent, hurt as oil fell. ConocoPhillips slid 3.6 percent to $81.62. Chevron shed 3.1 percent to $84.56.
Oil declined more than 11 percent in July, its biggest monthly slide since December 2004. On Thursday, the front-month U.S. crude oil contract settled at $124.08, down $2.69 for the day and off sharply from a record above $147 a barrel on July 11.
Walt Disney , a Dow component, shed 4.2 percent to $30.35 after the company said park bookings were flat.
Cleveland Rueckert, a research analyst at Birinyi Associates in Stamford, Connecticut, said some of the losses were the result of investors taking profits at month-end.
But Thursday's economic data also weighed on shares, particularly a Commerce Department report showing the economy grew at a 1.9 percent annual rate in the second quarter, below the 2 percent reading forecast by analysts in a Reuters poll.
The report also revealed that national output shrank in the final quarter of 2007, suggesting the United States may be closer to recession than previously thought.
"Traders did not like the economic news today," said Al Kugel, chief investment strategist at Atlantic Trust in Chicago, adding it "caused a fresh bout of anxiety."
But an upside surprise to July payrolls data on Friday could spark a market rebound. Analysts polled by Reuters expect the United States shed another 75,000 jobs this month.
"If payrolls (data) beats expectations, I would expect a very strong day in the market," Rueckert said.
Trading volume was moderate on the New York Stock Exchange, with about 1.45 billion shares changing hands, below last year's estimated daily average of roughly 1.90 billion. Volume was high on the Nasdaq, where about 2.39 billion shares traded, above last year's daily average of 2.17 billion.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of about 3 to 2 and by about 15 to 13 on the Nasdaq.
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