8/15/2013 9:45 AM ET|
Stocks tumble on disappointing earnings
Stocks opened in a sea of red Thursday, extending their losses from the previous session.
Stocks eased off their lows but were still sharply in the red Thursday, with major indexes having their biggest one-day drops since June, as investors digested a batch of disappointing earnings reports and a handful of mixed economic data. The market continued to gauge when the Federal Reserve might start to reduce its asset purchases.
The 10-year yield jumped to 2.82%, its highest level in two years.
"A lot of uncertainty creates volatility," said Todd Salamone, director of research at Schaeffer's Investment Research. "We had some bellwether names with disappointing earnings, and economic data that sparked tapering worries. We also broke below a support level on the S&P 500 at 1,685, which is the level where we entered August and the peak back in May."
The Dow Jones Industrial Average ($INDU) tumbled 200 points, dragged by Cisco (CSCO), extending losses a day after logging its first triple-digit loss since June. The blue-chip index is on track for its biggest weekly drop in nearly four months.
All key S&P sectors were firmly in negative territory, led by techs and financials.
On the economic front, New York state's manufacturing sector growth slowed to 8.24 in August from 9.46 in July, according to the latest report from the New York Federal Reserve. Economists had projected a reading of 10. A reading above zero indicates expansion in the sector.
And industrial production was unchanged in July as a decline in manufacturing output and utilities counteracted an uptick in mining activity, according to the Federal Reserve. Economists polled by Reuters had expected a gain of 0.3%.
Consumer prices edged up 0.2% in July, matching expectations, according to the Labor Department.
On the upside, weekly jobless claims fell 15,000 to a seasonally adjusted 320,000, hitting the lowest level in nearly six years, according to the Labor Department. Economists polled by Reuters had expected a reading of 335,000.
And homebuilder confidence rose near an eight-year high in August, according to the National Association of Home Builders. The NAHB/Wells Fargo Housing Market index rose to 59, the fourth-consecutive monthly gain. Analysts had expected a reading of 56.
Earlier, St. Louis Fed President James Bullard reiterated his comments from Wednesday that the central bank should wait for further evidence that the economy is firming before winding down its asset-purchase program.
"The committee still needs to see more data on macroeconomic performance from the second half of 2013 before making a judgement in this matter," Bullard said in remarks prepared for delivery to a breakfast event hosted by the St. Louis Fed.
Among earnings, Wal-Mart Stores (WMT) declined after the world's largest retailer reported disappointing quarterly and cut its revenue and profit forecasts for the year.
Kohl's (KSS) climbed even after the department store chain forecast current-quarter earnings below expectations after reporting a decline in second-quarter profit.
Cisco Systems posted earnings and revenue that edged above Wall Street expectations but shares tumbled heavily after the network equipment maker said it would cut 4,000 jobs in the face of uncertain demand for its products.
Billionaire investor Warren Buffet's Berkshire Hathaway sharply reduced its holdings of Kraft Foods (KRFT) and Mondelez (MDLZ) during the second quarter, according to Berkshire's quarterly filing with the SEC. Kraft Foods and Mondelez were created by a split up for Kraft Foods last October.
Meanwhile, Berkshire raised its stake in automaker General Motors (GM) to 40 million shares and reported a new stake in satellite television provider Dish Network (DISH) of nearly 550,000 shares, worth approximately $24 million.
Apple (AAPL)slid below $500 after closing above the level on Wednesday for the first time since January.
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VIDEO ON MSN MONEY
msn and all you left wing liberals spouting off how great Obama's economy was and oh your doing
better since he was in office? don't hear no propaganda Obama loving crap now uh? i hope all you
Obama aholes lost everything like the rest of us hard working americans! oh now he's making a
speech to Egypt after he bragged about how great is foreign policy was working! this man is a failure!
soylandra, stimulus, bailouts, detroit, irs, nsa, benghazi and fast n furious is enough to impeach him now!
Things on Main street have been dicey for some time, we still have a long way to go before this economy is performing at a acceptable level.
The lesson: Market fluctuations have NOTHING to do with "earnings reports" or "investor concerns" — it's all about PROFESSIONAL MARKET MANIPULATORS. If the manipulators want to make money from a rising market, the market will rise. If they want to make money from a declining market, the market will drop.
Interested in figuring out things Read “History of Early Rome” by Levy and The “Rights of Man” by Thomas Pain. It’s not one persons fault for a failure of a civilization it’s our entire civilization fault. When we can no longer distinguish the difference between right and wrong then that is the start of the land slide. Just like in sports going back to basic’s gets you in touch with the sport not getting more creative and repeating the same mistake over and over expecting a different result, this is insane.
Poor earnings were expected this quarter and you had plenty of notice about the 'correction' - it's been happening all week - but are the markets overreacting ? YES- that's what they do initially. But as the day wares on, we'll come off those lows, but will still be down quite a bit.
The Fed meeting is 9/18/13 to discuss that tapering schedule - IF THEY DECIDE TO REDUCE QE - it will be done in a orderly fashion. To take it down in 5 billion increments a month is not unreasonable - and would give us roughly 17 months to wean us off QE.
Slow and steady wins the race !
Wall Street has their arm out but Benny can't find the intravenous syringe...a total joke!
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