Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

U.S. Stocks Slip as Concerns Grow on Growth, Fed Take Hold

02/21/2013 | 02:14pm US/Eastern
Recommend:
0

--Stocks extend declines midday, as materials, technology shares lag

--DJIA off 81 points, S&P falls 12

--European PMI and Philadelphia Fed data jar investors after Wednesday worries

 
   By Alexandra Scaggs 
 

NEW YORK--Stocks continued to sink midday, after reports of manufacturing pullbacks in the U.S. and Europe were piled on top of investor concerns over the possibility of an earlier-than-expected end to the Federal Reserve's stimulus programs.

The Dow Jones Industrial Average fell 81 points, or 0.6%, to 13846, extending Wednesday's declines. The Standard & Poor's 500-stock index gave up 12 points, or 0.8%, to 1499, as eight of 10 sectors traded in the red and growth-sensitive materials, technology and energy shares weighed. The tech-heavy Nasdaq Composite Index lost 40 points, or 1.2%, to 3125.

Blue chips posted their second-biggest drop of the year Wednesday, as investors were jarred by the potential for an earlier-than-expected end to the Fed's experimental bond-buying programs, known as quantitative easing.

Easing "has been the source of a significant boost for the equity markets," said Natalie Trunow, chief investment officer for equities with Calvert Investments, which oversees $12 billion. "The follow-through [selling] today was on the realization that there is an end to it at some point."

Stocks extended their declines after the Philadelphia Federal Reserve's February index of business activity, an indicator of business conditions for manufacturers in the region, posted a surprise decline to -12.5 from January's -5.8.

"The fact that we are seeing evidence of a continuing slowdown in the manufacturing sector is a bit concerning," said Jim Baird, chief investment strategist for Plante Moran Financial Advisors, which manages $7.2 billion in assets.

Separately, initial claims for unemployment benefits rose to 362,000 in the latest week, more than the 350,000 expected. The consumer price index for January was unchanged on the month, but increased by 0.3% excluding volatile food and energy costs.

Sales of existing homes for January showed a slight increase to a seasonally adjusted annualized rate of 4.92 million, which was mostly in line with expectations. The Conference Board's Leading Economic Index for January gained 0.2%, just below expectations of a 0.3% rise.

Wal-Mart gained 2.6% after the blue-chip discount retailer reported earnings that exceeded analysts' estimates, helping to offset a first-quarter earnings outlook that was below analyst projections.

The losses in U.S. stock futures were more modest than declines in overseas markets.

In Europe, the Stoxx Europe 600 fell 1.5% in response to disappointing economic news for the euro zone. Markit's preliminary composite purchasing-managers' index for the currency bloc fell to 47.3 in February from January's 48.6, and below expectations of 48.5. Readings below 50 indicate contraction. Within the euro zone, Italy's FTSE MIB skidded 3.1% and Germany's DAX slid 1.9%.

The weak data sent the euro down to a six-week low against the dollar. Meanwhile, the dollar sank against the yen.

Asian markets also suffered steep declines, highlighted by a 3% tumble in China's Shanghai Composite, the biggest percentage decline seen since November 2011. Exacerbating worries about the Fed easing up on its stimulus program, China's State Council said on Wednesday that it would continue with market controls to curb increases in property prices.

Japan's Nikkei Stock Average shed 1.4% and Australia's S&P ASX 200 dropped 2.3%.

Gold futures edged up 0.1% to $1,579.60 a troy ounce. Crude-oil futures lost 2.1% to $93.21 a barrel. Yields on the benchmark 10-year U.S. Treasury note fell to 1.966% as prices rose.

Tesla Motors skidded 9.9% after the electric-car maker reported a wider-than-anticipated fourth-quarter loss and revenue that rose less than expected. Gross margin narrowed sharply.

Dow component Hewlett-Packard was mostly flat. Its fiscal first-quarter results are to be released after the closing bell.

Carlyle Group slumped 7.6% after it missed analyst estimates for its earnings and revenue. The private-equity firm recorded lower performance fees and recorded an investment loss.

VeriFone Systems tumbled 40%. The electronic-payments company indicated that fiscal first-quarter earnings and revenue would fall well short of expectations, citing weak economic conditions in Europe and delayed projects from several major customers. It also provided a downbeat outlook for the current quarter.

Pegasystems surged 8.2% after the business process-management company reported earnings and revenue that were much better than expected. It provided a 2013 outlook that was above current projections.

Hormel Foods rose 1.7%. The company reported fiscal first-quarter earnings and revenue in line with analyst estimates and raised its full-year earnings outlook to reflect the benefit of buying the Skippy peanut-butter business last month.

-Write to Alexandra Scaggs at alexandra.scaggs@dowjones.com

Recommend :
0
React to this article
Latest news
Date Title
<1m ago PLANTRONICS : CA/ : Results of Operations and Financial Condition, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K)
<1m ago WABASH NATIONAL : DE MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)
<1m ago WESTCORP : Management Awarded Management for Two Apartment Communities in Las Vegas
1m ago GLADSTONE COMMERCIAL : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)
1m ago BIOFUEL ENERGY : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)
1m ago RadioShack may run out of cash by Oct 2015 - Moody's
1m ago Hunter Bay Minerals Closes Debt Settlement
1m ago FORD MOTOR : All-New Deepsoft Leather Allows Lincoln to Bridge Past and Present with MKC
2m ago CALIX : Results of Operations and Financial Condition (form 8-K)
2m ago GREEN PLAINS : Reports Second Quarter 2014 Results
Latest news
Advertisement
Hot News 
STADIUM : makes Pounds 8m acquisition ; ACQUISITIONS coreena ford
GALECTIN THERAPEUTICS : Other Events, Financial Statements and Exhibits (form 8-K)
ESCHER : Half year trading update
BETTER CAPITAL PCC : Says Spicers To Transfer To OfficeTeam Fund
MOPOWERED : launches 3DS
Most Read News
8h ago DEUTSCHE BANK : pretax profit rises as markets focus pays off
1d agoDJQBE INSURANCE : Warns 1st Half Results Won't Meet Expectations
1d ago DARDEN RESTAURANTS : CEO to step down amid investor pressure, stock jumps
1d ago MASCO : Delivers Operating Growth in Second Quarter 2014
7h ago Airbus halts sale of six A380s to Japan's Skymark
Most recommended articles
1m ago RadioShack may run out of cash by Oct 2015 - Moody's
2m ago MICROSOFT : China regulator announces anti-monopoly probe of Microsoft
3m agoDJPROCTER & GAMBLE : Correction to VA Senate Confirmation Story
5m ago FACEBOOK : Twitter's user growth beats targets, shares skyrocket
8m agoDJSBERBANK ROSSII : U.S., EU Extend Sanctions on Russia -- 4th Update
Dynamic quotes  
ON
| OFF