Member access

4-Traders Homepage  >  News

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
Recommend:
0

--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

Recommend :
0
React to this article
Latest news
Date Title
<1m ago AT&T : Reconnecting McDowell and AT&T Announce Mentor-Internship Program
<1m ago PG&E6CPREF : FERC Issues Notice of Surrender of Preliminary Permit re Pacific Gas and Electric Company Under P-13059
<1m ago Kingsway Seafood Store Fined $12,000 for Selling Undersized Crab
<1m ago LINN ENERGY : FERC Issues Letter Order Accepting Berry Petroleum Company, LLC's 1/15/14 Filing of a Notice of Change in Status Stating That Berry Petroleum Has...
<1m ago PG&E6CPREF : FERC Issues Letter Order Granting an Extension of Time for Comments, Recommendations, Preliminary Terms and Conditions, and Preliminary Fishway...
<1m ago FINRA Board of Governors Decision Charles Schwab & Co., Inc. AWC
<1m ago BASF SE : Manufacturing Leaders Gather to Discuss Trade at Congressional Forum
<1m ago FANUC : Notice Concerning Distribution of Dividends of Surplus to Shareholders (for the six months ended March 31, 2014)
<1m ago UNITED URBAN INVESTMENT : Notice Concerning the Filing of a Petition for Provisional Disposition (Hotel JAL City Yotsuya Tokyo)
<1m ago PURECIRCLE : Dealings in Shares
Latest news
Advertisement
Hot News 
Successful share buyback for capital reduction
VOLGA GAS : Annual Report and Accounts and Notice of AGM
ROODMICROTEC : Highlights Annual General Meeting RoodMicrotec N.V. held on 24 April 2014
NOVARTIS' : INSTEAD study for Onbrez® Breezhaler® in patients with moderate COPD meets primary objective
WESSANEN : Royal Wessanen Q1 2014 trading update
Most Read News
1d ago AMAZON : revenue increases even as spending rises
1d ago BANK OF AMERICA : U.S. Justice Department seeks over $13 billion from BofA: Bloomberg
1d agoDJUNITED PARCEL SERVICE : UPS to Take Pre-Tax Charge on New Labor Contract -- 3rd Update
1d ago Visa says revenue growth to slow, Russia sanctions hurting volumes
1d ago Exclusive - Apple, Google agree to pay over $300 million to settle conspiracy lawsuit
Most recommended articles
1h ago Asian shares, dollar struggle on Ukraine anxiety
1d ago Healthcare deal hopes push FTSE to seven-week closing high
3d ago Barclays joins retreat from commodities as new rules bite
<1m agoDJSSAB : Net Loss Narrows
<1m agoDJNo Resolution for SA Platinum Miners' Strike
Dynamic quotes  
ON
| OFF