MARKET SNAPSHOT: U.S. Stocks Tumble Early On Global Economic Fears

Date : 06/24/2010 @ 10:01AM
Source : Dow Jones News
Stock : N^HAS (HAS)
Quote : 49.32  0.0 (0.00%) @ 2:05AM

MARKET SNAPSHOT: U.S. Stocks Tumble Early On Global Economic Fears

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By Donna Kardos Yesalavich

NEW YORK (Dow Jones) -- U.S. stocks fell Thursday despite better-than-expected reports on jobs and durable-goods orders, as worries about the global economy persisted.

The Dow Jones Industrial Average (DJI) was down 44 points, or 0.5%, to 10254, in early trading. Pfizer (PFE) was the measure's worst performer with a drop of 1.9%. The drug company said it would suspend osteoarthritis trials of its pain drug tanezumab after a "small number" of reports that patients' ailments worsened to the point of needing joint replacement. The company said the suspension followed a request by the Food and Drug Administration.

The Dow's financial components were also particularly weak. J.P. Morgan Chase (JPM) dropped 1.4% and Bank of America (BAC) declined 1.2%. The measure's top decliners also included Home Depot (HD), which fell 1.3%, and Alcoa (AA), which dropped 1.2%.

Just two of the Dow's 30 components managed to eke out gains: Microsoft (MSFT) rose 0.9% and United Technologies (UTX) edged up 0.1%.

The Nasdaq Composite (RIXF) declined 0.5% to 2243. The Standard & Poor's 500 (SPX) slipped 0.5% to 1087, with its financial and consumer-discretionary sectors leading the drop.

The drop came despite a bigger-than-expected drop in weekly jobless claims. Initial claims for jobless benefits fell by 19,000 to 457,000 in the week ended June 19, while economists had expected claims would fall by only 7,000.

Separately, the Commerce Department said durable-goods orders decreased by 1.1% to a seasonally adjusted $192.01 billion, but that was smaller than the 1.5% decline economists predicted. The number was weighed down by a 30% plunge in non-defense aircraft and parts that followed a 216% surge in April. Outside of the transportation sector, orders for all other durables rose by 0.9% in May, with gains in metals, machinery and computers.

However, investors continued to worry about the economy a day after the Federal Reserve's policy-making body kept its key interest rate near zero, as expected, but cast its policy statement with more downbeat language. "Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad," namely in Europe, the central bank said in its Wednesday statement.

Worries about Europe's economy come as Chancellor Angela Merkel roundly rebuffed U.S. President Barack Obama's call for Germans to aid the global recovery by spending more and relying less on exports, even as she warned that Europe's own financial crisis is far from over. In an interview with The Wall Street Journal in her Berlin chancellery, Merkel said the nations that share the beleaguered euro have merely bought some time to fix the flaws in their monetary union.

Meanwhile, the cost of insuring Greek sovereign debt against default rose further to hit another record early Thursday, according to data provider CMA DataVision.

The euro fell against the dollar, trading at $1.2290. The U.S. Dollar Index, reflecting the U.S. currency against a basket of six others, rose 0.1%. Treasurys also rose, pushing the yield on the 10-year note down to 3.09%, as investors moved toward safer assets. Crude-oil futures fell to nearly $76 a barrel while gold futures also declined.

Among stocks in focus, Apple (AAPL) edged up 0.7%. The company started selling the iPhone 4, the latest version of its popular smartphone, on Thursday morning to teeming crowds of eager Asian and European consumers--including some who waited three days to be among the first in the world to purchase the new handset.

Lennar (LEN) dropped 0.9%. The home builder swung to a fiscal second-quarter profit, easily beating analysts' estimates, helped by higher revenue. However, orders and deliveries fell.

Hasbro (HAS) shares were halted. Private-equity firm Providence Equity Partners is in preliminary discussions with the toymaker to take the company private in a leveraged buyout, people familiar with the matter said. Hasbro has a market capitalization of about $6 billion and a leveraged buyout of the S&P 500 company, which owns the G.I. Joe, Transformers and Nerf brands, would be the year's largest private-equity deal.

 
 

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