PALLAVI GOGOI
AP Business Writer= NEW YORK (AP) — Stocks slipped in early trading Thursday as unease over Europe overshadowed an encouraging report on unemployment claims and good results from big retailers including Wal-Mart Stores.
The Dow Jones industrial average was down 48 points at 12,548 in the first half-hour of trading. The Standard & Poor's 500 index fell seven points to 1,317. The Nasdaq composite fell 19 points to 2,854.
The Labor Department reported that applications for unemployment benefits held steady last week, a sign that layoffs are not increasing.
Wal-Mart stock rose 5 percent after reporting a 10 percent jump in first-quarter income, beating Wall Street expectations. It was a big turnaround for the retailer, which had suffered during the economic downturn as low-income customers were hit hard by joblessness and home foreclosures.
Despite positive news from the U.S., investors continue to fret about developments in Europe and whether Greece might be forced to exit the euro bloc, something that investors fear would cause turmoil on global markets.
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.
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Spain nationalized last week, plunged 20 percent on a report from the newspaper El Mundo stating that depositors have withdrawn over $1 billion since last Wednesday.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 traded lower. Chesapeake Energy fell 4 percent, while WPX Energy declined 6 percent.
Among other stocks making big moves:
— 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 7 percent after the beleaguered retailer turned a profit in the first quarter, benefiting from a gain on the sale of some stores.
European stocks and euro slump - ninemsn
Europe's main stock markets have tumbled and the euro hit a new four-month US dollar low as worries spiked over the eurozone debt crisis that is plaguing Greece and now circling Spain.
London's benchmark FTSE 100 index of top companies lost 1.24 per cent to 5338.38 points on Thursday, while in Frankfurt, the DAX 30 dropped 1.18 per cent to 6308.96 points, and in Paris the CAC 40 fell 1.20 per cent to 3011.99 points.
Milan's FTSE Mib tumbled 1.46 per cent and Madrid's IBEX 35 slumped 1.11 per cent.
In foreign exchange deals, the European single currency nosedived to a new four-month low at $US1.2667. It later recovered to $US1.2704, still down from $US1.2715 late in New York on Wednesday.
The dollar dipped to a three-month low of 79.26 yen, before later recovering to buy 79.42 yen, down from 80.32 yen on Wednesday.
"Markets are worried about eurozone bank deposit runs and an escalating banking crisis," VTB Capital economist Neil MacKinnon told AFP.
Shares in Spain's state-rescued lender Bankia plunged on Thursday on the back of newspaper reports that clients had withdrawn more than one billion euros in the past week, while Greeks have also reportedly stepped up pulling funds out of their banks.
Spain's daily newspaper El Mundo reported that Bankia managers told the board the bank had lost a "similar amount" of deposits this week as the 1.16 billion euros withdrawn by clients in the first quarter of the year.
Spain's fourth-largest bank had 112 billion euros in deposits from clients at the end of the first quarter.
It shares plunged by over a quarter at one point but later recovered to show a loss of 14.08 per cent for the day at 1.42 euros.
In another gloomy omen, official data confirmed that Spain sank into recession with a 0.3 per cent contraction in the first quarter of 2012, matching the decline of the previous quarter.
Spain raised 2.494 billion euros in a sale of three- and four-year government bonds on Thursday, but was forced to pay higher rates in a sign of mounting concern over the country's debt position.
Meanwhile, Germany's benchmark 10-year bond saw its own rate reach a new record low of 1.420 per cent as investors fled to financial safe-havens.
"As we have said all along, the biggest risk is Spain," said research director Kathleen Brooks at trading site Forex.com.
US stocks moved lower on eurozone jitters, with the Dow Jones Industrial Average down 0.45 per cent to 12,542.17 points in midday trading. The S&P 500-stock index lost 0.58 per cent to 1317.11 points, while the tech-rich Nasdaq fell 0.99 per cent to 2845.68.
Asian markets traded mixed on Thursday as the Greek crisis continued to cast a shadow, while dealers got some upbeat news in data showing Japan's economy grew faster than expected.
Tokyo rose 0.86 per cent, Seoul added 0.26 per cent and Shanghai climbed 1.39 per cent in value.
However, a late sell-off saw Hong Kong give up its day's gains to end 0.31 per cent lower, while Sydney eased 0.19 per cent.
Euro, global stocks drop on latest euro zone fears - Reuters India
NEW YORK |
NEW YORK (Reuters) - World stocks and oil prices fell o n Thursday on concerns about the health of Spain's banks and the prospect of Greece leaving the euro zone.
Adding to pressure on Wall Street stocks was a U.S. government report showing manufacturing in the mid-Atlantic states unexpectedly contracted in May.
The data helped lift safe-haven U.S. Treasuries prices, and pushed the 10-year note yield to just 5 basis points from its lowest level in at least 50 years, while gold prices rallied 2.6 percent.
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 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.
Global shares, as measured by MSCI's world equity index .MIWD00000PUS, declined 0.6 percent, and were set for a fifth day of losses along with U.S. stocks.
The Dow Jones industrial average .DJI was down 81.32 points, or 0.65 percent, at 12,517.23. The Standard & Poor's 500 Index .SPX was down 10.85 points, or 0.82 percent, at 1,313.95. The Nasdaq Composite Index .IXIC was down 42.57 points, or 1.48 percent, at 2,831.47.
The pan-European FTSE 300 index .FTEU3 dropped 1.2 percent, a fourth straight day of declines.
Brent crude futures extended losses to more than $2 a barrel on concerns about Greece and the wider euro zone. Brent July crude was down $2.33 at $107.42 a barrel, having fallen to $107.26, the low for the year.
"The oil market, like other risky assets, is within the grips of uncertainty surrounding the euro zone," said Harry Tchilinguirian, BNP Paribas head of commodities strategy.
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 euro earlier 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 $1.2722, up 0.1 percent.
The yen, though, posted sharp gains against the euro and dollar, bolstered by safety bids.
In the U.S. Treasury market, the benchmark 10-year Treasury note was up 16/32, its yield easing to 1.70 percent, - just 5 basis points from its lowest level in at least 50 years.
Gold prices also rose, with spot gold registering its largest one-day gain since late January.
Spot gold bounced to an intraday high of $1,579.70 and was last up 2.36 percent at $1,575.5 per ounce. That is up almost $50 since it plunged to December lows around $1,527 on Wednesday.
Stocks drop on Europe, worrisome economic reports - USA Today
The Dow Jones industrial average closed down 156 points at 12,442. The blue-chip index suffered its 11th loss in 12 days and could be headed for its first down month since September. The Standard & Poor's 500 index fell 19 points to 1,304. The Nasdaq composite fell 60 points to 2,813.
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.
MORE: Commodities prices
The Labor Department reported that applications for unemployment benefits held steady last week, a sign layoffs are not increasing. But 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 Caterpillar (CAT) fell 4%, 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.
The mostly 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.
On the bright side, Wal-Mart (WMT) stock rose 4% after reporting a 10% jump in first-quarter income, beating Wall Street expectations. It was a big turnaround for the retailer, which had suffered during the economic downturn as low-income customers were hit hard by joblessness and home foreclosures.
"'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 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%.
Collateral economic damage is already being felt by other members of the euro bloc.
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% on a report from the newspaper El Mundo stating that depositors have withdrawn over $1 billion since last Wednesday. The government denied that report.
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% from $106 two weeks ago.
Energy companies traded lower. Chesapeake Energy (CHK) fell 3%, while WPX Energy (WPX) declined 4%.
Among other stocks making big moves:
— GameStop (GME) fell 11% after the world's largest video game retailer reported its first-quarter profit fell 9.8%, as fewer customers visited its stores and bought new games and systems.
— Sears Holdings (SHLD) rose 3% after the beleaguered retailer turned a profit in the first quarter, benefiting from a gain on the sale of some stores.
Stocks, oil drop on latest euro zone fears - The Guardian
Asia stocks fall amid Greek political chaos - Yahoo Finance
BANGKOK (AP) -- Asian stock markets fell Wednesday, spooked by disappointing U.S. corporate earnings and fears that political turmoil in debt-crippled Greece is pushing it closer to financial disaster.
Japan's Nikkei 225 index fell 1.5 percent to hit a three-month intraday low of 9,021.20 as traders pulled away from big exporters whose fortunes are partly linked to demand from Europe.
The same went for shares in other export-driven economies such as China and South Korea. Hong Kong's Hang Seng fell 1 percent to 20,284.66 and South Korea's Kospi lost 0.9 percent to 1,950.68.
Australia's S&P/ASX 200 slipped 1.2 percent to 4,262.30 after falling prices for metals hurt mining shares. Benchmarks in mainland China, Singapore and Taiwan also fell.
Markets have been increasingly volatile since Greek voters last weekend rejected political parties that imposed the deep spending cuts required in exchange for bailout money to keep the country from bankruptcy. On Tuesday, left-wing politician Alexis Tsipras said the country was no longer bound by its promises to cut spending sharply.
But a failure to keep those promises could lead international lenders to cut off rescue funding. That would likely lead Greece to default — and to the exit door of the euro common currency.
"If Greece repudiates the agreement signed by the previous government, the most likely scenario is Greece will default," said Francis Lun, managing director of Lyncean Holdings in Hong Kong. "And then all hell will break loose, and Greece will get kicked out of the eurozone. It's like the end of the world for the eurozone."
Prices for most metals fell as the increasingly bleak outlook for the European economy renewed expectations of weak demand. Hong Kong-listed Zijin Mining Group Co., China's largest gold miner, dropped 4.1 percent. Aluminum Corp. of China plummeted 6.8 percent.
Australian mining giants also took hits. Rio Tinto Ltd. dropped 2.4 percent. Uranium miners Paladin Energy and Energy Resources of Australia tumbled 5.9 percent and 5 percent respectively.
But Panasonic Corp. jumped 2.3 percent in Tokyo after Kyodo News agency cited sources at the company as saying it expects to return to profit in the business year ending March 2013. Toyota Motor Corp., which will report annual earnings later in the day, rose 0.3 percent.
In the U.S., stock markets were sent lower by worries about Greece and sagging corporate results.
Wendy's Co. reported first quarter results that missed expectations on higher costs for ingredients like beef and lower-than-expected sales. Casino operator Wynn Resorts reported a drop in first-quarter earnings.
Meanwhile, McDonald's Corp., the world's largest hamburger chain, on Tuesday issued sales figures that missed analyst expectations.
The Dow Jones industrial average closed down 0.6 percent at 12,932.09. The Standard & Poor's 500 index fell 0.4 percent to 1,363.72. The Nasdaq composite index fell 0.4 percent, to 2,946.27.
Benchmark oil for June delivery was down 51 cents to $96.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 93 cents to settle at $97.01 in New York on Tuesday.
In currencies, the euro fell to $1.2971 from $1.3030 late Tuesday in New York.
The dollar fell to 79.73 yen from 79.79 yen.
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