Log in
Login
Password
Remember
Lost password
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

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

--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
02:33a DET NORSKE OLJESELSKAP ASA : Oil and gas discovery at Gina Krog East 3
02:33a CNH INDUSTRIAL NV : Capital Reports Closing of $600 Million Notes
02:33a CNH INDUSTRIAL NV : Design Department Launches Student Design Project
02:33a GREENE KING : Annual Profit Drops, But Revenue Rises
02:33a EMED MINING PUBLIC : Quarterly Financial Statements
02:33a INCITEC PIVOT : Dividend Reinvestment Plan ...
02:33a ECHO INVESTMENT : Q22 is the most city-forming commercial project in Warsaw’s Sródmiescie district
02:33a MIRVAC : MGR - Appendix 3B (pdf | 144 kB)
02:33a STM : Appointment of Non-Executive Director
02:33a HONDA MOTOR : Toyota, Nissan, and Honda Agree on Details of Joint Support for Hydrogen Infrastructure Development
Latest news
Advertisement
Hot News 
DOMINO PRINTING SCIENCES : Uhlmann and Domino in partnership as suppliers of choice for serialised pharmaceutical printing systems
HARBOURVEST HVGPE : Press Release 31 May 2015 Estimated Net Asset Value and Interim Management Statement
HMS BERGBAU : very satisfied with financial year 2014 (DGAP News)
BLUE STAR CAPITAL : Reports Loss In First Half
Signal Genetics Announces Master Service Agreement
Most Read News
01:34a MANCHESTER UNITED : Ramos: i'm mad for united
06/29 Microsoft hands display ads to AOL, maps to Uber
06/29DJBHP Billiton Shifts Responsibility for Potash Unit
06/29 DEUTSCHE LUFTHANSA : Lufthansa strikes postponed until mid-July, union says
06/29DJCelgene to Pay Juno $1 Billion as Part of 10-Year Collaboration
Most recommended articles
10:21a Greek opposition leader says wages, pensions at risk in referendum
10:20aDJSchnitzer Steel Swings to a Loss as Revenue Slides
10:16aDJOil Prices Rise as Investors Watch Iran Nuclear Talks
10:15aDJNIELSEN NV : Press Release : The Conference Board Consumer Confidence Index(R) Increases Again
10:15aDJMay Construction Spending Seen Up 0.5%--Data Week Ahead