US stocks slide on doubts over credit
BANKS led US stocks lower yesterday as the S&P 500 stalled near a 10-month high after signs of weak European business activity rekindled concerns about a recession overseas.
US banks were the S&P 500’s worst performing sector. Investors feared that weak Eurozone growth would hamper countries dealing with heavy debt loads and the banks exposed to those debts.
“We’re very concerned around the markedly deteriorating credit fundamentals in Europe,” said Steven Baffico, chief executive officer at Four Wood Capital Partners in New York.
Data showing weakness in the Eurozone services and manufacturing sectors overshadowed the day-old deal to bail out Greece.
After touching a near seven-month high on Tuesday, the KBW bank index fell two per cent. A key European bank index declined 2.5 per cent.
The S&P 500 index failed again to hold above 1,360, the high reached last May and a key resistance point that could spark further gains if broken. The benchmark index is up about eight per cent for the year and gained more than 20 per cent from its October lows.
The Dow Jones industrial average lost 27.02 points, or 0.21 per cent, to 12,938.67. The S&P 500 Index dropped 4.55 points, or 0.33 per cent, to 1,357.66. The Nasdaq Composite fell 15.40 points, or 0.52 per cent, to 2,933.17.
Oil services companies rose, partly offsetting the decline by banks. Drilling contractor Nabors Industries rose seven per cent to $21.78 a day after its operating results topped Wall Street expectations and as the chief executive detailed a retooling of the company.
The PHLX oil services sector index rose 1.7 per cent.
Home builder stocks fell, with the PHLX housing sector index down 1.4 per cent. Data showed US home resales surged to a one and a half year high in January but came in below forecasts.
Dell was one of the biggest drags on the S&P, tumbling 5.8 per cent to $17.10 in volume 2.5 times above its recent daily average. The computer maker forecast revenue below expectations late Tuesday.
After the market’s close, shares of computer maker Hewlett-Packard fell 1.4 per cent after reporting quarterly revenue below expectations.
About 6.3bn shares changed hands on the New York Stock Exchange, the Nasdaq and Amex, compared with last years daily average of about 7.8bn shares.