Wall Street slumps

Stocks slumped on Wall Street, and the rally which has pushed indexes close to record levels stalled.

Stocks slumped on Wall Street, and the rally which has pushed indexes close to record levels stalled.

The Dow Jones industrial average fell 42 points, or 0.3%, to 13,944, after sliding as much as 134 points earlier. The index has edged lower this week, after logging its best January in almost two decades.

The Standard and Poor’s 500 fell three points to 1,509 and the Nasdaq composite dropped three points to 3,165.

“We had such a big January, some type of weakness, or consolidation, make sense here to us,” said Ryan Detrick of Schaeffer’s Investment Research in Cincinnati.

The S&P 500 has lost an average of 0.58% in February over the last 20 years, making it the weakest month for stocks, according to research by Schaeffer’s.

Stocks fell as weaker earnings and worries about Europe overshadowed healthier signs for the US economy.

Fewer Americans sought unemployment benefits last week, a sign that lay-offs are easing. Applications for unemployment benefits fell 5,000 to 366,000.

But the stock price of News Corp fell 66 cents, or 2.3%, to 27.52 dollars after the media conglomerate cut its forecast for annual earnings. Weakness at several businesses, including its Fox broadcast network, should offset a gain in earnings in the most recent quarter.

Investors also worried about comments from European Central Bank president Mario Draghi. He pledged to keep a close eye on the rising euro, fearing that the currency’s rally in recent month could hurt exports and further harm the region’s fragile economy.

“You could have very weak growth in Europe for the next five or ten years,” said Michael Sheldon, chief strategist at RDM Financial Group.

“There’s a lot of austerity going through the European markets, so it’s going to be a long time before they re-establish themselves.”

Europe has returned to investor’s radars after several months of relative quiet. Stocks fell on Monday, partly because of a spike in borrowing costs for Italy and Spain. That reignited concerns that those countries will not be able to service their debts.

Stocks have jumped this year on optimism that the housing market will sustain its recovery and the job market will slowly heal. Corporate earnings growth has also accelerated.

As stocks fell, bonds rallied. The yield on the 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 1.95%.

more courts articles

Man (25) in court charged with murdering his father and attempted murder of mother Man (25) in court charged with murdering his father and attempted murder of mother
Man appears in court charged with false imprisonment of woman in van Man appears in court charged with false imprisonment of woman in van
Man in court over alleged false imprisonment of woman Man in court over alleged false imprisonment of woman

More in this section

FILE PHOTO The Competition and Consumer Protection Commission has cleared the purchase of Goodbody Stockbrokers by AIB END Goodbody Stockbrokers fined over €1.2m by Central Bank over rules breaches
Nottingham City Centre Stock Irish staff at the Body Shop wait for wages as retailer shuts stores in the Republic
Ryanair comments on Norwegian Ryanair boss O'Leary's spat with Transport Minister over Dublin Airport escalates
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited