US stocks piled up losses as negative news continued from Europe, with Greece’s woes deepening and Spain falling into recession.
Strong quarterly earnings from Wal-Mart, the world’s biggest retailer, were not enough to shatter the gloom on Wall Street on Thursday, sending the Dow industrials and the S&P 500 into their fifth straight day of losses.
The Dow Jones Industrial Average tumbled 156.06 points, or 1.24 per cent, to finish at 12,442.49.
The S&P 500-stock index dropped 19.94 (1.51 per cent) to 1,304.86, while the tech-rich Nasdaq plummeted 60.35 (2.10 per cent) to 2,813.69.
The three indices opened essentially flat then wallowed in the red the rest of the day. Discouraging US indicators on regional manufacturing and the economic outlook reinforced the bears.
“Data from the US economic docket disappointed investors, while concerns out of Greece and Spain continued to do their part in sinking global sentiment,” Charles Schwab & Co. analysts said.
US financial stocks suffered, with Bank of America down 1.8 per cent, Citigroup off 1.9 per cent and Morgan Stanley losing 0.6 per cent.
Embattled JPMorgan Chase plummeted 4.3 per cent. The New York Times reported that the bank’s initial estimate of a $2 billion trading loss has increased by at least $1 billion in recent days.
Dow member Wal-Mart jumped 4.2 per cent after reporting a 10.1 per cent surge in first-quarter profit, in a better-than expected unofficial end to the earnings season.
Hewlett-Packard edged up 0.1 per cent. The struggling company will unveil a vast restructuring plan next week that will include axeing about 30,000 jobs, Dow Jones’s AllThingsD reported.
Facebook’s ballyhooed market debut expected Friday had Wall Street buzzing.
Frederic Dickson, chief market strategist at DA Davidson & Co., noted that Facebook’s investment bankers were scheduled to price its IPO after the closing bell.
“Given the fact that Facebook increased its IPO share offering by 25 per cent this week, investor expectations appear sky-high… when it begins public trading on the Nasdaq,” he said.
After the close, Facebook set its IPO price at $38 per share, the top of its targeted range, valuing the leading social network at $104 billion.
The bond market rallied sharply as investors fled risk. The yield on the 10-year Treasury fell to 1.70 per cent from 1.76 per cent Wednesday, while the 30-year dropped to 2.81 per cent from 2.91 per cent.
Bond prices and yields move in opposite directions.