GLOBAL MARKETS-Stocks, oil drop on latest euro zone fears - Reuters UK
* World stocks down along with Wall Street shares
* Gold up 2.6 pct; Brent oil drops more than $2/bbl
* Concerns center on Greek, Spanish banks (Updates prices, adds details)
NEW YORK, May 17 (Reuters) - World stocks and oil prices fell o n T hursday 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Worries about Spanish banks resurfaced after a media report said customers of Bankia had withdrawn more than 1 billion euros from their accounts in the past week.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 , declined 0.6 percent, and were set for a fifth day of losses along with U.S. stocks.
The Dow Jones industrial average was down 81.32 points, or 0.65 percent, at 12,517.23. The Standard & Poor's 500 Index was down 10.85 points, or 0.82 percent, at 1,313.95. The Nasdaq Composite Index was down 42.57 points, or 1.48 percent, at 2,831.47.
The pan-European FTSE 300 index 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, oil drop on latest euro zone fears - The Guardian
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Stocks higher on better manufacturing report - Yahoo Finance
NEW YORK (AP) -- The fastest growth in U.S. manufacturing in 10 months gave stocks a lift in early trading Tuesday and put the Dow Jones industrial average on track for its highest close in more than four years.
U.S. manufacturing expanded last month at the strongest pace since June, according to the Institute for Supply Management. Orders, hiring and production all rose. A measure of manufacturing employment also reached a nine-month high, a hopeful sign ahead of Friday's monthly jobs report.
The manufacturing news jolted stock indexes out of a morning stupor. The Dow was up 112 points to 13,325 as of noon EDT. That put the average on course for its highest close since Dec. 28, 2007.
In a separate report, the Commerce Department said construction spending ticked up in March, following two months of declines.
Sam Stovall, chief equity strategist at S&P Capital IQ, said the two reports looked like evidence that the U.S. economic recovery is on solid footing despite turmoil in Europe and a weak jobs report last month.
"I think investors are encouraged there's at least one place in the world where it's still worth investing," Stovall said. "They're not ready to give up on this bull market yet."
Other indexes pushed higher. The Standard & Poor's 500 index rose 15 points to 1,414, five points shy of its closing high for the year, set on April 2. The Nasdaq composite climbed 35 points to 3,080.
Major car companies are reporting monthly auto sales on Tuesday. Industry watchers expect overall sales to rise 2 percent for April compared with a year earlier.
The S&P finished April in the red, its first losing month since November. The Dow managed a tiny gain.
Judging by its track record, May isn't a promising month for stocks. Since World War II, the S&P 500 index has gained an average of 0.31 percent in May. For all months, the average gain is 0.67 percent.
"It's a very undistinguished month," Stovall said.
Among stocks making big moves:
— Chesapeake Energy Corp. jumped 7 percent on reports that the company will replace its chairman, Aubrey McClendon. McClendon, the company's founder, was under fire for taking out more than $1 billion in loans using the company's wells as collateral. Chesapeake recently agreed to end the program that allowed McClendon to take personal stakes in the wells. McClendon will stay on as CEO.
— Archer Daniels Midland Co. gained 7 percent after the food conglomerate reported profits that beat analysts' expectations. Profits dropped by nearly a third over the past year, pulled down by one-time charges and lower weaker results from its ethanol and oilseeds businesses.
— Avon Products Inc. fell 8 percent, the biggest drop in the S&P 500. The company said earnings plunged 82 percent, hurt by a bigger restructuring charge, commodity costs and rising labor costs. The results were worse than analysts had expected.
Stocks open lower as Europe overshadows jobs data - Yahoo Finance
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.
Stocks Fall for Fifth Day on Euro Woes and Weak Data - TradersHuddle.com
New York, May 17th (TradersHuddle.com) – Stocks were once again under pressure on worries over Greece and Spain. The S&P 500 and the Dow logged their fifth losing day after Fitch downgraded Greece by one notch amid heightened risk. Economic data in the U.S. didn’t help, as factory activity in the Mid-Atlantic unexpectedly contracted and leading economic indicators fell for the first time in seven months.
The Dow Jones Industrial Average lost 156.06 points, or 1.24%. The S&P 500 index slumped 19.94 points, or 1.51%, while the NASDAQ tumbled 60.35 points, or 2.1%.
The market fluctuated around the neutral line as concerns over Spanish yields and its banking system dragged futures and the euro lower. U.S. initial claims data was generally inline with expectations, with 370,000 initial claims for unemployment benefits filed last week.
Stocks muddled through the session, with the NASDAQ clearly underperforming the other benchmark indices. At the final hour of trading, the market extended the decline amid Fitch negative action and chatter over problems in Spain’s banks.
All of the S&P 500 sectors closed in negative territory, with consumer discretionary, financials, materials, and industrials losing more than 2% in the session, while defensive sectors logged the smallest declines.
Consumer stocks received heavy pressure from homebuilder stocks and from video game retailer GameStop (NYSE: GME), which plunged to the bottom of the S&P 500 Index. Shares of GameStop tumbled more than 11% after the company quarterly results missed revenues expectations. GameStop also issued downside earnings guidance for the current quarter, while reaffirming earnings guidance for fiscal 2013.
Homebuilder stocks like PulteGroup (NYSE: PHM) and Lennar (NYSE: LEN) also dragged the sector to the biggest decline among the key S&P 500 sectors. Shares of PulteGroup and Lennar tumbled more than 8%.
Meanwhile, Sears Holdings (NASDAQ: SHLD) jumped after reporting its quarterly results and saying that it plans to spin off a large part of its stake in Sears Canada. Also among earnings, Wal-Mart (NYSE: WMT) jumped more than 4% to log the biggest percentage gain in the Dow Jones Industrial Average after it beat earnings and revenue expectations on better than expected same store sales for its domestic stores.
Financials were hit amid the ongoing crisis in Europe and on reports that JPMorgan’s (NYSE: JPM) losses have surged 50%, nearing $3 billion. The stock tumbled 4.3% to $33.93, as CEO Jamie Dimon has been called to testify in front of the Senate Banking Committee over the hedging loss. JPMorgan posted the second biggest percentage decline in the blue chip index.
The biggest decline in the Dow was from Caterpillar (NYSE: CAT), as shares slumped 4.4% to $87.80. The stock dragged on the industrial sector after the world’s largest earthmoving equipment maker reported dealer data, which showed slowing sales growth in April. Caterpillar reported that the biggest deceleration was in the Asia-Pacific Region.
The news weighed also on the materials sector, with stocks like Eastman Chemical (NYSE: EMN) tumbling more than 4% for the day. Gold miner Newmont Mining (NYSE: NEM) rallied 4%, as the price of the bullion snapped from a 4-day losing streak and surged in the day, as traders speculated that signals of slower growth would spur central bank action.
Meanwhile, Apple (NASDAQ: AAPL) dragged on the NASDAQ, as shares slumped nearly 3% to $530.12. The stock broke below its April low of $555 earlier in the week, leaving it open for further weakness. Some speculate that the buzz for the Facebook IPO and chatter over a hedge fund being short the name, might be prompting selling in the stock to raise funds in order to buy the Facebook shares that will start trading tomorrow after its IPO. In after hours, Facebook (NASDAQ: FB) announced that it priced its IPO at $38 per share, giving the social network company a valuation of $104 billion, while raising $16 billion from investors.
Also, Hewlett-Packard (NYSE: HPQ) was able to edge a gain in the session amid reports that the company is planning layoffs of between 8 to 10% of its workforce, which could impact up to 32,000 positions.
Asian stocks steady as sentiment improves - Financial Times
May 17, 2012 11:08 am
