Stocks Fall for Fourth Day on European woes
Published on Wednesday, 16 May 2012 18:40 Written by Christopher Lynn
New York, May 16th (TradersHuddle.com) – Stocks ended lower after choppy trading following the FOMC meeting minutes and after reports that suggested the ECB might halt monetary operations to some Greek banks. Economic data in the U.S. was better than expected but was not enough to shake off the Greek jitters and the global growth concern.
The Dow Jones Industrial Average lost 33.45 points, or 0.26%. The S&P 500 index fell 5.86 points, or 0.44%, while the NASDAQ dropped 19.72 points, or 0.68%.
The market started in positive territory in the wake of weak overseas performance after housing starts gained 2.6% in April and Industrial production jumped to its fastest rate in over the year. Overseas markets were struggling amid fears over Greece exiting the euro zone and after reports suggested loan growth in China was flat.
Most S&P 500 sectors fell, with financials, materials, and technology posting the biggest declines, while the defensive sectors, like consumer staples, healthcare, and utilities, edged a gain.
Financials were pressured amid the European jitters and following the FOMC minutes. Morgan Stanley (NYSE: MS) tumbled more than 4%, while Bank of America (NYSE: BAC) lost more than 2.5% to $7.11, breaking below its 200day moving average, and posting the biggest percentage gain in the Dow Jones Industrial.
Material stocks were also hit amid concerns over Chinese growth. Alcoa (NYSE: AA) was among the top decliners in the blue chip index, as shares tumbled 2.5%. Vulcan Materials (NYSE: VMC) also dragged the sector lower, as shares tumbled more than 8% in the session amid a the biggest drop in shares of Martin Marietta (NYSE: MLM) in three years following Greenlight Capital co-founder David Einhorn criticism.
Technology fell, as Apple (NASDAQ: AAPL) continued to get no love. Shares of the iPad maker fell more than 1% to $546, a level not seen since March of this year. Apple was pressured after DoubleLine Capital CEO Jeffrey Gundlach indicated that he now has a short position in the technology firm. However, David Einhorn countered that Apple is little understood despite its popularity. He said that Apple, “monetizes value through the repeated sales of high-margin software and it could reach a $1 trillion market capitalization.
First Solar (NASDAQ: FSLR) also dragged in the sector, tumbling more than 8% to a new low; while Google (NASDAQ: GOOG) posted the biggest gain in the sector, as shares rallied nearly 3% amid the launch of the next generation of search results, which the company said will be more relevant.
A notable mover in the industrial sector and on the blue chip index was General Electric (NYSE: GE), as shares jumped 3.26% on news that its finance arm will resume its quarterly dividend to the parent company and pay a special dividend of $4.5 billion to the holding this year.
Among earnings Target (NYSE: TGT) climbed 0.44% to $55.32 after posting earnings that topped expectations helped by the warm weather and an early Easter. Target raised expectations for the year. On the weak side, J.C. Penny (NYSE: JCP) plunged nearly 20%, posting the biggest stumble in the broad market index after earnings widely missed consensus. Along the line, Abercrombie & Fitch (NYSE: ANF) succumbed 13% in the session after a sharp fall in earnings thanks to a decline in same-store sales, as its exposure to Europe hurt the specialty teen retailer.
Elsewhere, Deere (NYSE: DE) tumbled 3% to $74.18 despite posting earnings that beat expectations, while boosting its full-year guidance.
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