Stocks retreat as Europe, earnings weigh


Share
Posted Online: Feb. 07, 2013, 7:30 pm
Comment on this story | Print this story | Email this story
NEW YORK (AP) — 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.



















 



Local events heading








  Today is Tuesday, Oct. 21, the 294th day of 2014. There are 71 days left in the year.

1864 -- 150 years ago: The weather is discouraging for our great Democratic rally tomorrow, but never mind that. Let our Rock Island people show they can make a big procession themselves, rain or shine.
1889 -- 125 years ago: Apparatus arrived for drilling an artesian well on the premises of George Warner's Atlantic Brewery.
1914 -- 100 years ago: The German army continued its attacks on the allies line near the Belgian coast.
1939 -- 75 years ago: The farm home of Mr. and Mrs. Gus Zachert northwest of Buffalo Prairie, burned to the ground.
1964 -- 50 years ago: WVIK-FM, noncommercial educational radio station at Augustana College, will return to the air tomorrow. The station operates at a power of 10 watts at 90.9 megacycles on the frequency modulation band. The station is operated with a staff of 92 students.
1989 -- 25 years ago: An avenue of lights, 13 Christmas trees strung with more than 44,000 sparkling lights, will expand the Festival of Trees beyond the walls of RiverCenter in downtown Davenport in mid-November.


(More History)