Published August 15, 2013
FOX Business: Capitalism Lives Here
The markets took a pounding on Thursday as the specter of rising U.S. Treasury yields and uncertain corporate outlooks sent traders scurrying for the exits.
The Dow Jones Industrial Average fell 225 points, or 1.5%, to 15112, the S&P 500 dropped 24.1 points, or 1.4%, to 1661 and the Nasdaq Composite slid 63.2 points, or 1.7%, to 3606.
The selloff on Wall Street was broad on Thursday. Every major sector was in the red, led by consumer discretionary and technology stocks. Meanwhile, the CBOE's VIX, seen as the Street's fear gauge, spiked some 11%.
The number of individuals filing for first-time jobless benefits fell to 320,000 last week from an upwardly-revised 335,000 the week prior. Economists expected claims to rise to 335,000 from an initially-reported 333,000. Claims came in at the lowest level since October 2007.
Treasury bond yields climbed sharply on the back of the report, with the 10-year rate rising 0.081 percentage point to 2.796%.
"The spike in yields is clearly worrying investors and as is normally the case when yields move in such a manner, equities are reacting negatively," said Dan Greenhaus, chief global strategist at BTIG.
A separate report from Labor showed consumer prices rose 0.2% in July matching Wall Street’s expectations. Excluding food and energy, prices climbed 0.2%, also meeting estimates.
The Philadelphia Federal Reserve's gauge of manufacturing activity in the U.S. mid-Atlantic region dropped to 9.3 in August from 19.8 in July, widely missing expectations of 15. The reading suggests the rate of expansion cooled.
The New York Fed's measure of manufacturing activity fell to 8.24 in August, from 9.46 in July, missing consensus estimates of 10. Readings above 0 indicate expansion, while those below indicate contraction. A more closely-watched survey from the Philadelphia Federal Reserve at 10:00 a.m. ET is expected to indicate the expansion mid-Atlantic manufacturing sector having cooled off just slightly on the same basis.
Wal-Mart (WMT), the world's biggest retailer, cut down its full-year outllook. Shares of the Dow heavyweight dropped some 2% in early trading. Fellow blue chip Cisco (CSCO) said after the bell Wednesday it would cut 4,000 jobs amid a slower sales pace.
Elsewhere in corporate news, Warren Buffett's Berkshire Hathaway raised its holdings in General Motors (NYSE:GM) and initiated a position in Dish Networks (DISH).
In commodities, U.S. oil futures gained 36 cents, or 0.34%, to $107.22 a barrel. Wholesale New York Harbor gasoline climbed 0.26% to $2.991 a gallon. In metals, gold rose slightly to $1,334 a troy ounce.
The Euro Stoxx 50 fell 0.56% to 2836, the English FTSE 100 plummeted 1.3% to 6502 and the German DAX declined 0.76% to 8374.
In Asia, the Japanese Nikkei 225 tumbled 2.1% to 13753 and the Chinese Hang Seng edged lower by 0.01% to 22539.
Editor's Note: A previous version of this report inaccurately stated Berkshire Hathaway reduced its position in Coca-Cola. The conglomerate, in fact, made no change to its stake.