Tags: dow | falls | stocks

Dow Falls for the 11th Time in Past 12 Sessions

Thursday, 17 May 2012 05:04 PM

U.S. stocks hit a four-month low on Thursday as rising Spanish bond yields increased investor anxiety over that country's banks and another round of weak data undermined hopes for U.S. economic recovery.

Growing worries over developments in the euro zone and lackluster economic data pushed the S&P's losing streak to five consecutive days. The index, which closed at a level not seen since mid-January, has now relinquished more than half of its gains from the first quarter.

"There is not a lot of interest in the equity market," said Jason Weisberg, managing director at Seaport Securities Corp in New York. "The overhang with Europe is so heavy, people are tired of playing whack-a-mole, and their portfolios are the mole."

The Dow Jones industrial average dropped 156.06 points, or 1.24 percent, to 12,442.49. The Standard & Poor's 500 Index fell 19.94 points, or 1.51 percent, to 1,304.86. The Nasdaq Composite Index lost 60.35 points, or 2.10 percent, to 2,813.69.

Caterpillar Inc dropped 4.5 percent to $87.77 as the biggest drag on the Dow after the heavy equipment company's dealers reported slowing sales for April. The Dow declined for an eleventh session in the past 12.

A gauge of future U.S. economic activity fell in April for the first time in seven months, and the Philadelphia Federal Reserve's index of business conditions hit its lowest since September.

In addition, the weekly claims for jobless benefits showed no improvement, a sign the pace of hiring remains lackluster.

Spain's El Mundo newspaper reported that customers at troubled Spanish lender Bankia had withdrawn more than 1 billion euros over the past week, a report which the Spanish government denied.

Adding to concerns about the region, Spain's borrowing costs shot up at a bond auction. Bankia shares fell 14 percent in European trading after sliding as much as 30 percent earlier.

News that some Greek banks face emergency funding needs hurt sentiment and caused a further decline in risk assets, which have dropped over recent weeks. The CBOE Volatility Index jumped 9.3 percent and hit its highest level since mid-December.

With a pattern of brief gains during recent trading sessions fizzling quickly, bulls saw little reason to fight the selling pressure.

"Everyone is inclined to sell into rallies rather than buy into dips, find any excuse to sell," said Terry Morris, senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania.

Facebook Inc priced its initial public offering at $38 per share, valuing the world's largest social network at more than $100 billion. The stock begins trading Friday on the Nasdaq.

The Nasdaq fell on weakness in tech shares. Apple Inc lost 2.9 percent to $530.12 and Qualcomm Inc fell 3.3 percent to $57.16.

Dollar Tree fell 6.1 percent to $95.13 and was one of the biggest percentage decliners on the Nasdaq 100 after giving a second-quarter profit outlook that was below expectations.

The S&P has fallen 6.1 percent so far in May, and while volatility is expected to continue, the persistence of the losses have some analysts forecasting a near-term rebound.

Wal-Mart shares advanced 4.2 percent to $61.68 after the world's largest retailer reported better-than-expected quarterly profit.

Sears Holdings Corp gained 3.1 percent to $52.42 after the company said it plans to spin off a large part of its stake in its Canada unit to better focus on its U.S. business.

GameStop Corp tumbled 11.1 percent to $18.52, the biggest percentage decliner on the S&P, after it forecast second-quarter earnings that were below expectations.

Volume was heavy with about 8.25 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the daily average of 6.81 billion.

Declining stocks outnumbered advancing ones on the NYSE by 2,652 to 412, while on the Nasdaq, decliners beat advancers 2,021 to 483.

© 2021 Thomson/Reuters. All rights reserved.

Thursday, 17 May 2012 05:04 PM
Newsmax Media, Inc.
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved