US STOCKS-Concerns over Spain spark profit-taking - Reuters UK US STOCKS-Concerns over Spain spark profit-taking - Reuters UK

Friday, July 20, 2012

US STOCKS-Concerns over Spain spark profit-taking - Reuters UK

US STOCKS-Concerns over Spain spark profit-taking - Reuters UK

Fri Jul 20, 2012 5:30pm BST

* Spanish region asks for financial help, markets fret

* Google advances after results, Microsoft down

* Kayak, Palo Alto surge in market debut

* Indexes down: Dow 0.84 pct, S&P 0.87 pct, Nasdaq 1.11 pct (Updates to midday, changes comment, byline)

By Rodrigo Campos

NEW YORK, July 20 (Reuters) - Bank stocks led Wall Street lower on Friday after a Spanish region asked the Madrid government for financial aid, rekindling fears about Europe's economic crisis and prompting traders to cash in recent gains.

Spanish benchmark bond yields hit euro-era highs on the news despite the approval of the terms of a bailout of Spain's banks, bringing back worries that the euro zone's fourth-largest economy would eventually need to be bailed out.

The news overshadowed another round of strong corporate earnings including a profit beat at General Electric and strong advertising revenue at Google.

Europe had been quiet earlier in the week, allowing Wall Street to move higher, "but it looks as if Europe is taking center stage again, with Spain as the main act," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

Wall Street had rallied for the past three days as robust corporate earnings, especially in the technology sector, briefly took the spotlight away from the euro zone's debt crisis.

On Friday, the technology sector of the S&P 500 outperformed the broader market with the help of Google shares, which were up 2.8 percent at $609.65.

The KBW bank index fell 1.4 percent taking its weekly decline to 1.8 percent so far.

The Dow Jones industrial average fell 108.38 points, or 0.84 percent, to 12,834.98. The S&P 500 Index dropped 11.98 points, or 0.87 percent, to 1,364.53. The Nasdaq Composite lost 32.84 points, or 1.11 percent, to 2,933.06.

The S&P on Thursday hit a 2-1/2 month high as record high prices in Treasuries kept yield-seekers focused on stocks despite a softening economy. Bets on further Federal Reserve action in support of the economy are also credited for helping equities hold amid poor economic data.

Microsoft on Thursday adjusted earnings and revenue that beat expectations, but its first-ever quarterly loss discouraged investors and shares fell 0.9 percent to $30.38.

Schlumberger Ltd climbed 1.9 percent to $69.96 as revenue rose more than expected on international growth. Xerox Corp fell 2.8 percent to $6.99 after cutting its full-year profit forecast.

Kayak Software shares soared 27 percent to $33 on their Nasdaq debut and Palo Alto Networks also jumped, up 33 percent to $55.93 as they began trading on the NYSE. (Reporting by Rodrigo Campos, editing by Dave Zimmerman)

US STOCKS SNAPSHOT-Nasdaq down 1 pct as Wall St losses accelerate - Reuters UK

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Stocks Remain Firmly Negative In Mid-Day Trading - U.S. Commentary - NASDAQ

( - Stocks have moved mostly lower over the course of the trading day on Friday, partly offsetting the gains posted in recent sessions. Selling pressure has remained somewhat subdued, however, limiting the downside for the markets.

The major averages have moved roughly sideways in recent trading, stuck firmly in negative territory. The Dow is down 82.49 points or 0.6 percent at 12,860.87, the Nasdaq is down 25.61 points or 0.9 percent at 2,940.29 and the S&P 500 is down 9.32 points or 0.7 percent at 1,367.19.

The weakness on Wall Street is partly due to profit taking following the recent gains, which lifted the major average back toward near-term resistance. Lingering concerns about the economic outlook are also weighing on the markets.

Traders are also keeping an eye on the latest developments in Europe, where the eurozone finance ministers gave their final nod of approval for a 100 billion euro bailout deal for troubled Spanish banks. The decision to backstop the Spanish banking sector was unanimous.

In the beginning, 30 billion euros will be set aside for use in case of "urgent unexpected financing needs," the Eurogroup said. The first tranche is likely to be made available by the end of this month.

The markets are also digesting the latest batch of earnings news, including quarterly results from tech giants Microsoft (MSFT) and Google (GOOG).

After the close of trading on Thursday, Microsoft reported fourth quarter adjusted earnings of $0.73 per share, ahead of the $0.62 per share consensus estimate. Revenues, adjusted for deferred revenues, rose 7 percent to $18.60 billion, ahead of the consensus estimate.

Google's second quarter adjusted earnings rose to $10.12 per share from $8.74 per share last year. Revenues, excluding traffic acquisition costs, totaled $8.36 billion, slightly shy of the $8.41 billion expected by analysts.

Diversified conglomerate General Electric (GE) released its second quarter results before the start of trading, reporting earnings that exceeded estimates but on slightly weaker than expected revenues.

Nonetheless, trading activity remains somewhat subdued amid a lack of major U.S. economic data, with some traders looking to get a head start on the weekend after making some early moves.

Sector News

Steel stocks have moved sharply lower over the course of the trading day, dragging the NYSE Arca Steel Index down by 2.4 percent. Universal Stainless (USAP) is leading the sector lower, plummeting by 16.9 percent after reporting weaker than expected second quarter results.

Considerable weakness has also emerged among airline stocks, as reflected by the 1.9 percent loss being posted by the NYSE Arca Airline Index. The loss extends a recent downward move by the index, which has fallen to its lowest intraday level in a month.

Brokerage and banking stocks are also seeing significant weakness, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index falling by 2 percent and 1.4 percent, respectively.

Railroad, networking, and software stocks have also come under pressure on the day, while notable strength among oil service and housing stocks has helped to limit the downside for the markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index tumbled by 1.4 percent, while China's Shanghai Composite Index ended the day down by 0.7 percent.

The major European markets also showed notable moves to the downside on the day. The U.K.'s FTSE 100 Index fell by 1.1 percent, while the German DAX Index and the French CAC 40 Index plunged 1.9 percent and 2.1 percent, respectively.

In the bond market, treasuries have shown a strong upward move, climbing back toward record highs. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.5 basis points at 1.46 percent.

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