Stocks Fell as Economic Concerns Weighed

Published on Monday, 16 July 2012 18:37 Written by Christopher Lynn

New York, July 16^th (TradersHuddle.com) – Stocks fell after a choppy day of trading following retail sales figures that disappointed investors, showing a third consecutive drop, and amid ongoing worries over the impacts of a global slowdown in corporate profits.

The Dow Jones Industrial Average lost 49.88 points, or 0.39%. The S&P 500 index fell 3.14 points, or 0.23%, while the NASDAQ dropped 11.53 points, or 0.40%.

The market started under slight pressure amid a weak overseas session in which worries over slower growth in corporate profit weighed on sentiment and after a disappointing June Retail Sales report showed retail sales falling for the third consecutive month and well off consensus. Also, the Empire State Manufacturing Index rebounded in July, which helped limit the day’s losses.

Meanwhile, Chinese Premier Wen Jiabao said China's economy has not yet entered a recovery and economic difficulties may continue for some time; and the IMF lowered its global growth forecast and warned that outlook could dim further if policymakers in Europe do not act to tackle the region's debt crisis.

Most of the S&P 500 sectors ended lower, with only healthcare and energy ending in positive ground, while industrials, consumer discretionary, and staples logged the worst performances. The energy sector was the best performer as crude oil saw a lift amid stimulus hopes, Iranian tensions and reports a U.S. Navy ship fired to a ship in the Persian Gulf. Denbury Resources (NYSE: DNR) rallied to the top of the sector, as shares jumped 3.8%, while Phillips 66 (NYSE: PSX), former ConocoPhillips downstream business, jumped 3.3% after Oppenheimer initiated coverage on the stock with Outperform and a target price of $42.

Also providing a lift to the sector was Anadarko Petroleum (NYSE: APC) after the stock was upgraded to Outperform at Credit Suisse, which spurred a rally in the shares of 2.7%. Meanwhile, Alpha Natural Resources (NYSE: ANR) plunged to the bottom of the S&P 500 Index after it tumbled more than 10% following a downgrade to Underperform at BMO Capital and as worries over Chinese growth weighed on price action.

In the industrials sector, Ingersoll-Rand (NYSE: IR) tumbled more than 3%, while Joy Global (NYSE: JOY) lost 2.9%.

Consumer stocks were also under pressure, as retailer weighed on the sector. Lowe’s (NYSE: LOW) tumbled to the bottom of the discretionary space, with a loss of 3.44%, closely followed by Abercrombie & Fitch (NYSE: ANF). In the staples side, Dean Foods (NYSE: DF) tumbled more than 7% after it was downgraded to Market Perform from Outperform at BMO Capital, and Mead Johnson Nutrition (NYSE: MJN) lost more than 5% after it was downgraded to Sector Perform from Outperform at RBC Capital.

However, Gannett (NYSE: GCI), the publisher of USA Today, jumped 2.66% after the company reported earnings that topped earnings expectations.

Also in the earnings front, Citigroup (NYSE: C) added 0.6% after the lender reported quarterly earnings that topped expectations on revenue that was slightly lighter than expected.

In tech land, Apple (NASDAQ: AAPL) mustered a gain of 0.32% to $606.91 amid reports that Nokia was slashing the price of its flagship smartphone, as it struggles to compete with the iPhone and Android based devices.

Meanwhile, Microsoft (NASDAQ: MSFT) gained 0.17% on news that the company sold its 50% stake on MSNBC.com to NBC Universal, a unit of Comcast, and as the software giant unveiled a new version of its Office suite tailored for touch screen devices.

Elsewhere, Human Genome (NASDAQ: HGSI) rallied more than 4% after GlaxoSmithKline (NYSE: GSK) agreed to acquire the company for $14.25 per share, or about $3 billion.

Facebook (NASDAQ: FB) slumped 8% to $28.25 on high volume amid speculation over a possible banking app from Citigroup and on news the company continued to expand its portfolio by purchasing Spool, a mobile bookmarking service.