NEW YORK: US stocks closed lower but off earlier steep losses Monday as Wall Street focused on European political and economic uncertainty and some US earnings results missed expectations.
The Dow Jones Industrial Average sank 102.09 points (0.78 percent) to finish the trading session at 12,927.17.The broad S&P 500-stock index dropped 11.59 (0.84 percent) to 1,366.94, while the tech-rich Nasdaq slid 30.00 (1.00 percent) to 2,970.45.”Economic concerns from around the globe have stoked a bearish mood on Wall Street,” said Karee Venema at Schaeffer’s Investment Research.Wall Street joined global stock losses as a slew of disappointing economic and corporate reports weighed on sentiment.
“While the domestic economic calendar was void of any scheduled releases, eurozone business activity unexpectedly decelerated, while a preliminary report showed Chinese manufacturing output continued to slow,” Charles Schwab & Co. analysts said.”Moreover, political uncertainty in France and the Netherlands added to the anxiety on the Street.”Chinese manufacturing activity contracted for the sixth straight month, and in the 17-nation eurozone, private-sector activity shrank the most in five months.
The Dutch government collapsed Monday, a day after French President Nicolas Sarkozy lost a first-round presidential vote to Socialist Francois Hollande.Dutch Prime Minister Mark Rutte and his cabinet resigned after his government failed to reach agreement over austerity measures.Wal-Mart led the blue-chip Dow lower, plunging 4.7 percent after saying over the weekend it is probing bribe allegations against its Mexican operations.On Monday, two senior US congressmen launched an investigation into the allegations.
On the earnings front, ConocoPhillips posted a 2.0 percent profit drop for the first quarter, missing expectations. Shares fell 0.8 percent.Breakfast cereal maker Kellogg plunged 6.1 percent after reporting weaker-than-expected first-quarter sales, hurt by Europe, and lowering its full-year forecast.Pfizer slid 0.8 percent after announcing the sale of its infant food business Pfizer Nutrition to Swiss food giant Nestle for $11.85 billion in cash.
Microsoft fell 0.9 percent after agreeing a $550 million deal to sell hundreds of AOL patents to social network giant Facebook.After the closing bell, Facebook reported quarterly profit slipped to $205 million despite a surge in revenue as it bumped up research and promotion expenses ahead of its stock market debut.The Wall Street sell-off came after a mixed close Friday. The Dow climbed 0.5 percent, the S&P 500 added 0.1 percent and the Nasdaq lost 0.2 percent.Bond prices rose as yields dropped. The yield on the 10-year Treasury fell to 1.93 percent from 1.97 percent Friday, while the 30-year Treasury dropped to 3.08 percent from 3.13 percent. – Brecorder