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US stocks fall on weak economic data

Feb 22 2013 07:45
AFP

New York - US stocks closed lower on Thursday, hit by weak data on US manufacturing and a glum turn downward in the much-watched Markit purchasing managers index that suggested more recession in the eurozone.

The Dow Jones Industrial Average finished down 46.92 points to 13,880.62.

The broad-based S&P 500 retreated 9.53 points to 1,502.42, while the tech-rich Nasdaq Composite dropped 32.92 to 3,131.49.

A note from Charles Schwab & Co cited a number of weak economic reports that contributed to the drop, including a measure of eurozone business activity, an analysis of the level of manufacturing activity in the US mid-Atlantic region and the number of weekly US jobless claims.

"Dampened global economic sentiment is contributing to the bulk of the extended sell-off," the Schwab note said.

The retreat also came as the market continued to digest the debate within the Federal Reserve on whether to maintain an aggressive bond-buying program.

Meanwhile, the impending March 1 deadline for deep government spending cuts, which economists say will slow US growth, hung over the market.

The majority of Dow members closed in the red. The biggest losers included retailer Home Depot (-3.1%), industrial manufacturer Caterpillar (-1.8%), chip manufacturer Intel (-2.3%) and Bank of America (-3.2%).

Verifone Systems, which designs and markets electronic payment systems, fell 42.8% after its preliminary financial results disappointed investors.

Wal-Mart gained 1.5% after it reported earnings that bested expectations and announced an increase in its dividend.

Aerospace giant Boeing proved another exception among Dow members, gaining 1.6% despite reports that United Airlines would keep its six Boeing 787 aircraft grounded until May 12.

Berry Petroleum added 19.3% after Linn Energy announced a plan to acquire the company for $4.3bn, including debt.

Grocery retailer Safeway surged 14.1% after reporting earnings that bested last year's level by a wide margin.

Bond prices rose. The yield on the 10-year Treasury bond fell to 1.98% from 2.02% late on Wednesday, while the 30-year fell to 3.17% from 3.21%. Bond prices and yields move inversely.


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