Stocks retreat as Europe, earnings weigh
NEW YORK — Stocks slumped on Wall Street Thursday, and the rally which has pushed indexes close to record levels stalled.
The Dow Jones industrial average fell 42 points to 13,944, after sliding as much as 134 points earlier. The index has edged lower this week, after logging its best January in almost two decades.
The Standard and Poor's 500 fell three points to 1,509 and the Nasdaq composite dropped three points to 3,165.
“We had such a big January, some type of weakness, or consolidation, make sense here to us,” said Ryan Detrick of Schaeffer's Investment Research in Cincinnati.
The S&P 500 has lost an average of 0.58 percent in February over the last 20 years, making it the weakest month for stocks, according to research by Schaeffer's.
Stocks fell as weaker earnings and worries about Europe overshadowed healthier signs for the U.S. economy.
Fewer Americans sought unemployment benefits last week, a sign that layoffs are easing. Applications for unemployment benefits fell 5,000 to 366,000.
But the stock price of News Corp. fell 66 cents, or 2.3 percent, to $27.52 after the media conglomerate cut its forecast for annual earnings. Weakness at several businesses, including its Fox broadcast network, should offset a gain in earnings in the most recent quarter.
Investors also worried about comments from European Central Bank president Mario Draghi. He pledged to keep a close eye on the rising euro, fearing that the currency's rally in recent month could hurt exports and further harm the region's fragile economy.
“You could have very weak growth in Europe for the next five or ten years,” said Michael Sheldon, chief strategist at RDM Financial Group. “There's a lot of austerity going through the European markets, so it's going to be a long time before they re-establish themselves.”
Most of Europe's major stock indexes ended the day lower. Only Germany and Greece bucked the trend.
Europe has returned to investor's radars after several months of relative quiet. Stocks fell on Monday, partly because of a spike in borrowing costs for Italy and Spain. That reignited concerns that those countries won't be able to service their debts.
Still, some say that the decline is more of a pullback than a sell-off. That will give investors a chance to buy stocks at lower prices in anticipation of the market resuming its rally.
Stocks have jumped this year on optimism that the housing market will sustain its recovery and the job market will slowly heal. Corporate earnings growth has also accelerated.
“There's really nothing new to worry about it,” said Sam Stovall, chief equity strategist at S&P Capital IQ.
As stocks fell Thursday, bonds rallied. The yield on the 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 1.95 percent.
Among other stocks making big moves:
— Akamai Technologies Inc., which helps websites deliver online content, plunged $6.32, or 15.2 percent, to $35.26, after revenue missed forecasts.
— Sprint Nextel Corp fell 3 cents, or 0.5 percent, to $5.74. The country's third-largest wireless carrier lost $1.3 billion in its latest quarter as it revamped its network to take on larger competitors. The company also lost 243,000 customers in contract-based plans.
— DeVry surged $4.29, or 16.4 percent, to $30.41 after the struggling for-profit education company reported better-than-expected earnings and analysts praised the its cost-cutting and restructuring efforts.
— Auto parts retailer O'Reilly Automotive jumped $7.45, or 8 percent, to $100 after earnings beat Wall Street forecasts.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- UPMC offering buyouts to 3,500 employees in cost-cutting move
- EPA to release biofuels proposal by June 1
- Citizens Bank executive kept busy by spinoff
- Billionaires club to decline as they retire
- Air bag fix may be more elusive than hoped
- Tight supply pushes home prices higher
- Pittsburgh gasoline prices nearing $3
- Beaver Valley nuclear reactor returns to service
- Energy investors push green tactics
- Proposed Charter-Time Warner merger would yield 3rd-largest provider
- Media heads rule ranks of best-paid CEOs