--U.S. stocks decline as European Central Bank's measures disappoint investors
--U.S. retail sales mixed; teen-clothing sellers lag, miss views
--Weekly U.S. jobless claims rise less than expected
NEW YORK--Disappointment with the European Central Bank's latest
response to the region's debt crisis sparked a slide in stocks,
commodities and the euro.
The Dow Jones Industrial Average fell 117 points, or 0.9%, to 12854 in
late-afternoon trading, on pace for its fourth-straight decline. The
Standard & Poor's 500-stock index lost 13 points, or 0.9%, to 1362.
Energy shares led declines in the index, as crude-oil prices slid 1.8%
to $87.30 a barrel.
The Nasdaq Composite Index retreated 14 points, or 0.5%, to 2906.
ECB President Mario Draghi pledged to draw up a set of unconventional
measures to preserve the euro, but his comments disappointed investors
looking for more concrete plans. The central bank left key interest
rates unchanged, as expected.
Gold futures dropped 1% to $1,591.20 a troy ounce. The euro hit a
session low of $1.2174, plunging from the day's high of $1.2406.
"The ECB has been the only game in town, and Draghi made a minor
mistake in overpromising and underdelivering," said Jim McDonald,
chief investment strategist for Northern Trust, which oversees $704.3
billion in assets. "There was an expectation that there might be some
specific plans announced on bond purchases, and there was no
specificity."
European stocks tumbled, with Spain's IBEX 35 sliding 5.2%, and
Italy's FTSE MIB losing 4.6%. Overall, the Stoxx Europe 600 dropped
1.3%.
"This action by the ECB today highlights the fact that they don't have
the ability to just, with the signing of the pen, fix their financial
problems," Mr. McDonald said. "In light of that, the U.S. is a
relative safe haven."
Also in focus was Knight Capital Group, whose shares plunged 62% after
the brokerage said it is pursuing ways to "strengthen its capital
base" after glitches in its electronic-trading system caused price
swings in about 150 stocks, a misstep the company said will likely to
cost it $440 million.
The decline extended a 33% slide in Knight's stock Wednesday, the day
the problems occurred. The company has lost two-thirds of its market
capitalization in a little over 24 hours.
Concerns about Europe overshadowed mixed U.S. economic data. The
number of workers filing applications for jobless benefits rose to
365,000 last week, a smaller increase than economists had expected,
according to a Dow Jones Newswires poll. The prior week's figure was
revised higher.
Factory orders unexpectedly fell in June, the latest sign the slowing
economy is sapping demand. The 0.5% decrease compared with economists'
expectation for an increase by the same percentage.
Gap jumped 12% and Macy's gained 3.3% after the retailers' same-store
sales for July topped analysts' predictions. Gap also projected
better-than-expected earnings for the latest quarter.
Teen-apparel sellers lagged behind. Abercrombie & Fitch tumbled 13%
after the company lowered its outlook for the year based on
softer-than-expected sales trends. Aeropostale plunged 34% after
saying it expects it broke even in the second quarter, rather than its
earlier prediction of a profit.
Sealed Air slid 18%, leading the S&P 500 lower, after the maker of
Bubble Wrap and other packaging products lowered its current-year
forecast.
Yelp climbed 17% after the local listings site reported a
narrower-than-expected second-quarter loss and raised its full-year
revenue outlook.
Eloqua rose 17% after the business software maker's initial public
offering priced at the high end of its projected range.
Facebook fell 4.6%, dropping below $20 for the first time since the
social network's initial public offering. The company disclosed
details about its customer base, such as an estimate that 4.8% of its
monthly active users were likely a duplicate account at the end of the
second quarter.
Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 02, 2012 06:55 ET (10:55 GMT)
No comments:
Post a Comment