Log in
Lost password
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  News


Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

U.S. Stocks Slide Amid Europe Concerns; Tech Shares Weigh

02/04/2013 | 03:58pm US/Eastern

--Major benchmarks slump amid concerns over Europe

--Dow threatens first triple-digit point decline in 2013

--Technology stocks weigh on major benchmarks

   By Chris Dieterich and Matt Jarzemsky 

NEW YORK--The Dow Jones Industrial Average slumped Monday toward its first triple-digit drop this year, as weakness in technology stocks helped derail a five-week rally for the blue chips.

The Dow sank 106 points, or 0.8%, to 13904 in late-afternoon trading. Monday's decline followed the Dow closing above 14000 for the first time since October 2007 Friday, having climbed 6.9% so far in 2013.

"What we're dealing with is that we've had quite a run higher, and it follows that it's time to digest some of those gains," said Brian Lazorishak, portfolio manager and quantitative analyst at Chase Investment Counsel.

The Standard & Poor's 500-stock index lost 14 points, or 0.9%, to 1498. All 10 S&P 500 sectors lost ground, with particular weakness in technology shares. Oracle Corp. dropped 2.7% after agreeing to buy Acme Packet Inc., which makes telecommunications equipment, in a deal valued at $1.7 billion.

The technology-oriented Nasdaq Composite Index fell 38 points, or 1.2%, to 3141. Facebook Inc. fell 5.1%, continuing a slide that began last week, after its shares hit their highest level since July.

Broad declines in the U.S. followed those in Europe, where the Stoxx Europe 600 shed 1.5%. Spanish and Italian bond yields rose, and stocks from those countries declined sharply, on concerns about political graft and Italy's banking sector.

Spain's IBEX 35 index slid 3.8%, while Italy's FTSE MIB slumped 4.5%. Spanish Prime Minister Mariano Rajoy moved to contain a scandal over alleged cash payments to him. In Italy, weakness in bank stocks was compounded by a criminal investigation into derivatives trading.

"In the short run, a lot of the people who were ready and willing to buy stocks have already done so," said Bill Stone, chief investment strategist at PNC Asset Management Group. "And, in the backdrop today, the market is revisiting the jitters in Europe," he said.

Asian markets were mostly higher after data released over the weekend showed a continued expansion in China's services sector in January. China's Shanghai Composite rose 0.4%, and Japan's Nikkei Stock Average gained 0.6%.

In U.S. economic news, orders for manufactured goods rose in December, according to the Commerce Department, but its 1.8% increase was shy of a 2.2% rise expected by economists.

Stock-rating downgrades from analysts pressured a trio of Dow heavyweights. Drug maker Merck & Co. was among the worst performers on the Dow, falling 1.9% after analysts at Morgan Stanley cut their rating on the stock, voicing pessimism about the company's drug pipeline.

Wal-Mart Stores Inc. fell 1.1% after analysts at J.P Morgan Chase cut the retailer's stock rating to "neutral" from "overweight," noting that the recent expiration of payroll-tax cuts could hamper sales growth.

Chevron Corp. fell 0.6% after analysts at UBS cut its stock recommendation, noting that the stock no longer looks cheap after gains of nearly 10% over the past 12 months.

In other corporate news, Clorox Co. rose 1% after the consumer-products company reported that improved sales and price increases drove profit margins higher, and it issued an optimistic estimate for its full-year earnings.

McGraw-Hill Cos. tumbled 11%, leading the S&P 500 lower, after reports that the Justice Department and state prosecutors plan to file civil charges alleging wrongdoing by the company's Standard & Poor's Ratings Services business. S&P said the potential lawsuit, involving its rating of mortgage bonds before the financial crisis erupted in 2008, was "entirely without factual or legal merit."

Gannett Co. slumped 5.6% after the publisher of USA Today and other newspapers saw its quarterly earnings fall 12%. The company's print-advertising revenue continued to fall, while revenue perked up in digital subscriptions.

Shares of Herbalife Inc. dropped 0.8% after the New York Post reported the company may be under investigation by the Federal Trade Commission. In a statement issued Monday afternoon, Herbalife described the report as "misleading and inaccurate information" and called on the Post to issue a correction. Herbalife's shares fell as much as 12% earlier.

Health insurer Humana Inc. was up 4.6%, the best-performing stock on the S&P 500, after posting fourth-quarter earnings that topped estimates.

Sysco Corp. declined 2.5% after the food-services distributor posted higher restructuring-related charges, offsetting benefits of increased sales in the most recent quarter.

Front-month March crude-oil futures fell 1.6% to $96.17 a barrel, while February gold futures rose 0.4% to settle at $1,675.30 a troy ounce. The dollar rose against the euro but slipped against the yen. Yields on benchmark 10-year Treasury notes fell to 1.973% as demand rose.

Write to Chris Dieterich at christopher.dieterich@dowjones.com and Matt Jarzemsky at matthew.jarzemsky@dowjones.com

React to this article
Latest news
Date Title
06:18a OMNIA : Lawmakers want feds to slow Horizon plan
06:14a ALLERGAN : Data Presented at IDWeek Reports AVYCAZ™ (ceftazidime and avibactam) Demonstrated In Vitro Antimicrobial Activity Against Common Enterobacteriaceae Pathogens, Including Certain Carbapenem-Resistant Strains
06:09a TRIPADVISOR : Curry house is named the nation's No 1
06:09a AEROFLOT : Information for Transaero passengers with tickets for 11 October 2015
06:09a KEC : wins orders of Rs. 668 crore
06:08a TATE & LYLE : Sweet taste of success ; Letters
06:08a BRUNEL : Kestrel captured in stunning close-up above Brunel's line
06:07a GREAT WESTERN MINING : 'Trains slower than 1977' - claim defended
06:07a GOGO : Man with dead cat inside car is son of retired San Jose police captain
06:06a SOTHEBYS : Picasso masterpiece up for estimated Pounds 39m
Latest news
Hot News 
6D GLOBAL TECHNOLOGIES : SIXD Levi & Korsinsky, LLP Announces the Commencement of an Investigation Involving Possible Securities Fraud Violations by Certain Officers and Directors of 6D Global Technologies, Inc.
ADGORITHMS : Annual Earnings To Miss Expectations On Market Disruption
UTi Announces Agreement to be Acquired by DSV in Transaction Valued at $1.35 Billion
SMART TECHNOLOGIES : Updates Financial Outlook and Announces Strategic Review
SOLARWINDS : DameWare Remote Support Enhances Over-the-Internet Desktop Troubleshooting Capabilities
Most Read News
10/09 NASDA NATIONAL ASSOCIATION OF STATE DEPARTMENT O : South Carolina: Statement from Commissioner Hugh Weathers about Rain Damage
10/09 GOMEZ TRIAL ATTORNEYS : and Baron & Budd, P.C. File More Butte Wildfire Lawsuits
10/09 Goldberg Law PC Announces an Investigation of Claims Against Ocean Rig UDW Inc. on Behalf of Investors
10/09 IMPORTANT INVESTOR DEADLINE : Goldberg Law PC Reminds Investors With Losses in Volkswagen AG of November 24, 2015 Deadline
02:17a Cruise news
Most recommended articles
05:45aDJIn Bank Earnings, Clues on Housing Market's Health
01:06aDJTV Trouble for Millions of Viewers as Dish, Tegna Hit Stalemate
10/09 Top Sectors and Industries To Watch During 3Q US Earnings
10/09 VOLKSWAGEN : Mexico expects first results in Volkswagen probe in three months
10/09 WEEKLY TRADING FORECAST : Will a Rebound in Equities Hobble the Dollar and Lift Carry Currencies?