US Stocks Slide; DJIA Posts Third Triple-Digit Plunge in a Row -- FEC

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Date Posted: 07:03:39 07/25/12 Wed
Author: Tuesday 24/7/2012manufacturing data, (DuPont stumbled)
Subject:

US Stocks Slide; DJIA Posts Third Triple-Digit Plunge in a Row

US Stocks Slide; DJIA Posts Third Triple-Digit Plunge in a Row
25/07/2012 6:34AM
--Stocks sink on raft of bad manufacturing data, earnings

--Stocks extend losses after reports that Greece will need to again restructure its debt

--Richmond Fed manufacturing data show sharp contraction in July

--Stocks pare losses after WSJ says Fed is moving closer to more action to boost the economy.

By Chris Dieterich

NEW YORK--The Dow slid to its third straight triple-digit point decline as poor corporate-earnings underscored growth worries and concerns mounted about Greece's ability to pay its debts.

The Dow Jones Industrial Average fell 104.14 points, or 0.82%, to 12617.32 points, though the blue-chip benchmark trimmed its losses in Tuesday' final minutes after The Wall Street Journal reported the Federal Reserve is moving closer to taking additional action to boost the economy.

For the Dow, Tuesday's drop extends to three its streak of consecutive sessions with declines of greater than 100 points, the longest since September.

The Standard & Poor's 500-stock index fell 12.21 points, or 0.90%, to 1338.31, and the Nasdaq Composite Index dropped 27.16 points, or 0.94%, to 2862.99.

Telecommunications stocks lagged most as all 10 of the S&P 500's sectors retreated. AT&T declined 2.1% after reporting second-quarter earnings that were above consensus analyst estimates, though revenue missed Wall Street's view.

Bellwether United Parcel Service fell 4.6% after the package-delivery company's second-quarter earnings and revenue missed estimates, and it lowered its full-year earnings outlook, citing increasing economic uncertainty in the U.S. and continued weakness in Asia.

Dow component DuPont stumbled 2% after the chemical company's second-quarter earnings also topped estimates but revenue fell short of expectations. In addition, the company said full-year earnings would be at the low end of its previously provided range.

Texas Instruments slipped 0.9% after the microchip maker reported second-quarter earnings that beat forecasts, but revenue fell short and it indicated third-quarter revenue would be below current projections.

"There are definitely headwinds and caution in what managements are forecasting for the rest of the year," said Tim Evnin, partner at Evercore Wealth Management.

Major benchmarks extended declines minutes after the opening bell after the Federal Reserve Bank of Richmond offered a reading on Central-Atlantic manufacturing in July that showed a sharp contraction. Earlier, Markit Economics' preliminary July reading on the U.S. factory sector showed it barely expanded.

Losses widened around midday after a Reuters report that Greece will need to restructure its debt again, citing European Union officials. The report compounded anxieties stirred in recent days about Greece's future membership in the euro zone and Spain's rising borrowing costs.

The Dow had fallen nearly 200 points late in the session, but stocks came back from session lows after The Wall Street Journal reported that Fed officials "appear increasingly inclined" to shore up the economy.

"It looks like hopes for QEIII," said Keith Springer, president of Springer Financial Advisors, referring to a third round of quantitative easing, the central bank's asset-purchase program. "The thing is, the Fed's liquidity has had a diminishing effect."

The reports on Greece accelerated declines across European markets, which were already lower after the Continent's own discouraging manufacturing data. The Stoxx Europe 600 shed 0.5%, losing ground for the third session in a row. Earlier, Markit's preliminary factory-sector reading for the euro zone was unchanged in July, indicating a sixth consecutive month of contraction. In Germany, the measure slipped in July from June.

Asian markets were mixed. The Shanghai Composite rose 0.2% after HSBC's preliminary July reading on China's factory-sector rose to the strongest level in five months. Meanwhile, Japan's Nikkei Stock Average slipped 0.2%.

Crude-oil futures gained 0.4% to $88.50 a barrel, while gold futures fell 0.1% to settle at $1576.00 a troy ounce. The U.S. dollar rose against the euro as the common currency hit a fresh two-year low against the U.S. currency. Investors snapped up bonds, driving down the yield on 10-year U.S. Treasury notes to 1.404%. On Monday, yields on the benchmark 10-year notes hit a record low.

Among other stocks, Whirlpool dropped 7.5% after the company's second-quarter profits fell short of Wall Street forecasts.

Cisco Systems sank 5.9%, becoming the biggest decliner on the Dow, after the networking company on Monday said it would lay off about 1,300 employees.

DeVry tumbled 25% after the for-profit education company indicated fiscal fourth-quarter earnings would fall well short of analyst estimates compiled by FactSet, and said it would eliminate about 570 jobs, citing continued softness in enrollment trends.

Write to Chris Dieterich at christopher.dieterich@dowjones.com.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

July 24, 2012 16:34 ET (20:34 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

Updates
25/07/2012 6:58AM Correction to US Stocks Slide; DJIA Notches Third Triple-Digit Plunge in a Row

Previous Stories
25/07/2012 6:10AM Nasdaq Tumbles 27.16 (0.94%) to 2862.99; Telecoms and Materials Lead Retreat (headline only)
25/07/2012 6:09AM U.S. Stocks Slide; DJIA Drops 104.14 (0.82%) to 12617.32; Cisco Tumbles (headline only)

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