Stocks fall on Europe, worrisome economic reports - AP - Stocks fall on Europe, worrisome economic reports - AP -

Thursday, May 17, 2012

Stocks fall on Europe, worrisome economic reports - AP -

Stocks fall on Europe, worrisome economic reports - AP -

Stocks slipped Thursday after a couple of downbeat economic reports from the U.S. and unease over Europe overshadowed positive earnings from the largest American retailer and an encouraging jobs report.

The Dow Jones industrial average was down 64 points at 12,534 shortly after noon. The Dow is on its way to its 11th loss in the past 12 trading days. It's down 6 percent for the month so far and could be headed for its first down month since September.

The Standard & Poor's 500 index fell 10 points to 1,314. The Nasdaq composite fell 30 points to 2,844.

Caterpillar fell 4 percent, the most of the 30 stocks in the Dow Jones index, after reporting that global sales growth of construction and mining machinery slowed in the three months through April. Wal-Mart stock rose 5 percent, the most in the Dow, after reporting a 10 percent jump in first-quarter income, beating Wall Street expectations.

Indexes opened lower on Wall Street following declines in European markets. The declines accelerated at mid-morning after the Federal Reserve Bank of Philadelphia said manufacturing slowed in the mid-Atlantic region for the first time in eight months. New orders decreased and firms cut jobs.

Also, the Conference Board said its measure of future U.S. economic growth fell in April after six months of increases. The drop reflected fewer requests for building permits and a spike in applications for unemployment benefits.

These gloomy reports were a surprise and came as investors continued to fret about whether Greece might be forced to exit the euro bloc, something that investors fear would cause turmoil on global markets.

"The U.S. economy is growing slowly and not going gangbusters," said Brian Gendreau, market strategist at broker-dealer Cetera Financial Group. "But Europe is very much on investors' minds. It's been two years with multiple bailouts involving Ireland, Portugal and Greece and things don't seem to be getting better."

Greece's caretaker Cabinet was sworn in Thursday and will hold power at least until next month's election. In the recently-held elections Greeks didn't given any party a majority, but they did give strong support to politicians who rejected the tough austerity measures that came with the country's financial bailout.

Without that rescue package, Greece will likely default and be forced to leave the 17-country euro zone, which would destabilize other countries that use the euro. German, French and Spanish stock markets all fell more than 1 percent.

Collateral economic damage is already being felt by other members of the euro bloc.

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Spain was forced to pay sharply higher interest rates to raise $3.18 billion in a debt auction Thursday. And shares of Bankia, which Spain nationalized last week, plunged 20 percent on a report from the newspaper El Mundo stating that depositors have withdrawn over $1 billion since last Wednesday.

Oil prices continued to trade lower, falling below $93 a barrel on Thursday, extending a sharp two-week sell-off, as traders worried about the potential impact on global growth from the European crisis. Crude oil has plummeted about 12 percent from $106 two weeks ago.

Energy companies fell. Chesapeake Energy fell 4 percent, while WPX Energy declined 6 percent.

Among stocks making big moves:

— Media General soared 38 percent after billionaire Warren Buffett's company Berkshire Hathaway agreed to buy 63 newspapers from the company for $142 million.

— GameStop fell 9 percent after the world's largest video game retailer reported its first-quarter profit fell 9.8 percent, as fewer customers visited its stores and bought new games and systems.

— Sears Holdings rose 8 percent after the beleaguered retailer turned a profit in the first quarter, benefiting from a gain on the sale of some stores.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Euro, global stocks drop on latest euro zone fears - Reuters India

NEW YORK | Thu May 17, 2012 10:38pm IST

NEW YORK (Reuters) - The euro and world stocks declined on Thursday on concerns about the health of Spain's banks and the prospect of Greece leaving the euro zone.

On Wall Street stocks fell after a government report showing manufacturing in the mid-Atlantic states unexpectedly contracted in May.

Worries about Spanish banks resurfaced after a media report said customers of Bankia (BKIA.MC) had withdrawn more than 1 billion euros from their accounts in the past week. The Spanish government said there had been no such exit of deposits.

Shares of the partly nationalized Bankia fell 13.5 percent but recovered some of the losses after the government's denial.

The developments in Spain followed reports that customers of Greek banks were moving funds in on the belief the country would

exit the euro, adding to broader anxiety about the region's debt crisis.

"The whole equities market is being driven by a macro trade based upon contagion fear in Europe, and really the problem is undercapitalized banks there," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

The euro dropped to $1.2665, its lowest level since mid-January, past stop-loss sell orders below $1.2680 and on course for a test of its 2012 low of $1.2623, according to Reuters data. It last traded at $1.2701, down 0.1 percent.

The single currency has already shed 3.9 percent in May, coming close to its 2012 trough of $1.2624 reached in mid-January.

Global shares, as measured by MSCI's world equity index, declined 0.7 percent, and were set for a fifth day of losses along with U.S. stocks.

The Dow Jones industrial average was down 98.46 points, or 0.78 percent, at 12,500.09. The Standard & Poor's 500 Index was down 13.09 points, or 0.99 percent, at 1,311.71. The Nasdaq Composite Index was down 40.03 points, or 1.39 percent, at 2,834.01.

The pan-European FTSE 300 index dropped 1.1 percent, a fourth straight day of declines.

U.S. government bond prices rose. The benchmark 10-year Treasury note overcame technical resistance near 1.75 percent. The 10-year note was up 12/32, its yield easing to 1.72 percent, - just 5 basis points from its lowest level in at least 50 years.

Investors followed the heated political debate in Athens where opponents of harsh austerity measures to obtain an international bailout are expected to win new elections in June.

The worries over Greece also caused a sharp fall in oil futures. Brent July crude was down $1.12 at $108.63 a barrel.

Gold, however, rose more than 1 percent, bouncing off a 4 1/2-month low. Spot gold rose to $1,553.80 an ounce from $1,538.30 late in New York on Wednesday, when it plunged to $1,527 - its weakest since December 29.

The precious metal climbed to a high of $1,557.56 earlier, helped by the approaching expiry of gold options in the COMEX futures market.

(Reporting by Caroline Valetkevitch; additional reporting by Richard Hubbard and Silvia Antonioli in London and Rodrigo Campos in New York, editing by Kenneth Barry)

Stocks with Strong Financial Metrics (NYSE: LAD) -
Shares of LAD fell by 6.50% or $-1.57/share to $22.60. NYSE is trading at a price to book ratio of 1.65. The PEG is 0.41 suggesting that the shares are trading at an excellent value relative to firm's growth rate. The price to sales ratio came in at 0.22. Hence, the firm is extremely cheap relative to its top line sales figures. On average, 394802 shares of LAD exchange hands on a given day and today's volume is recorded at 513446. These factors combined may make this company a potential takeover candidate. Lookout for any takeover chatter or takeover news regarding this stock as one of the bigger players may have an eye on this one.

Lithia Motors, Inc. is an operator of automotive franchises and a retailer of new and used vehicles and services.

Homebuilder Stocks Roll Over (XHB) -

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