Published September 26, 2012
FOX Business: The Power to Prosper
Hurt by a steep slide in Europe and sinking technology stocks, U.S. stocks were stuck mostly in reverse Wednesday afternoon, threatening to deliver the S&P 500 its first five-day losing streak since mid-July.
As of 3:12 p.m. ET, the Dow Jones Industrial Average dropped 35.13 points, or 0.26%, to 13422.42, the S&P 500 lost 6.82 points, or 0.47%, to 1434.80 and the Nasdaq Composite declined 26.55 points, or 0.76%, to 3094.20. The FOX 50 dipped 4.29 points, or 0.39%, to 1087.00.
The major indexes were off their lowest levels of the day as the blue chips had been down nearly 50 points earlier in the session.
Still, the selling activity builds on Tuesday's triple-digit tumble, which was the Dow's worst performance since August 30.
Wednesday's declines began overseas as Asian markets tumbled overnight and Europe suffered its steepest one-day tumble since early August amid deteriorating market sentiment about the never-ending sovereign debt debacle.
It's not clear if there was a specific trigger for the euro selling, but television images showed clashes between police and an estimated 200,000 protestors in Greece, which is grappling with its first general strike since the new coalition government was formed back in June. Riots also broke out overnight in Spain as well over new austerity measures there.
European markets have also been hit by jitters ahead of the looming Spanish bank stress tests and budget announcement on Friday. Also, finance ministers in Germany, the Netherlands and Finland suggested the eurozone's bank bailout fund should not applied to bank "legacy assets."
A day after its worst decline since July 20, the Nasdaq Composite experienced selling again, driven lower by another decline for Apple (AAPL) and other tech stocks like Oracle (ORCL). Apple has disappointed investors by saying it sold 5 million iPhones last weekend, which badly missed some estimates on Wall Street.
On the economic front, home builders like Lennar (LEN) and KB Home (KBH) slumped after the Commerce Department said new home sales dipped 0.3% in August to a rate of 373,000 units, missing forecasts for a rise to a pace of 380,000 units. On the other hand, July new home sales were raised slightly at August median new home prices posted their biggest gain in nearly eight years to $256,900 -- the highest level since March 2007.
The mixed new home sales data come a day after the S&P-Case/Shiller home price index showed prices in 20 U.S. cities ticked up 1.6% in July from June, slightly trailing estimates.
In the commodities complex, crude oil slipped below $90 a barrel for the first time since August 3 even after new data showed crude oil stockpiles tumbled by 2.45 million barrels last week, more than double forecasts. Crude slid $1.39 a barrel, or 1.52%, to $89.98. Gold lost $13.20, or 0.75%, to $1,750.60.
The losses on Wall Street come after the blue chips retreated 101 points, or 0.75%, on Tuesday. Economically-sensitive stocks experienced selling pressure in the wake of Caterpillar (CAT) slashing its 2015 earnings targets and skepticism from Philly Fed President Charles Plosser over QE3, the central bank’s latest bond-buying exercise.
RadioShack (RSH) announced the exit of CEO James Gooch, prompting the embattled electronics retailer to kick off a search for a new leader. RadioShack tapped CFO Dorvin Lively to take over on an interim basis.
American Greetings (AM) rallied 16.6% after the card company disclosed receiving a $580 million go-private offer from a group led by CEO Zev Weiss and his family. The bid is worth $17.18 a share, marking nearly a 20% premium on the company's Tuesday close.
Jabil Circuit (JBL) tumbled 9% a day after the contract manufacturer logged a weaker-than-expected fiscal fourth-quarter profit and posted a disappointing outlook for the current quarter.
Dollar Thrifty (DTG) reached the conclusion of its “go-shop” period late Wednesday night without finding another suitor, paving the way for shareholders to vote on the car rental company’s approximately $2.6 billion buyout from larger rival Hertz (HTZ).
The Euro Stoxx 50 tumbled 2.72% to 2498.52, London’s FTSE 100 retreated 1.56% to 5768.09 and the German DAX dropped 2.00% to 7276.51.
In Asia, Hong Kong’s Hang Seng slid 0.83% to 20527.73 and the Japanese Nikkei 225 plunged 2.03% to 8906.70.