December 15, 2017
Thursday, January 15, 2015

Wall Street drops for 5th day on global weakness worry; Intel down late

US stocks fell for a fifth straight session as bank results disappointed and investors fretted over the potential impact of global economic weakness on US corporate earnings.

Energy shares extended recent losses as US oil prices settled down more than 4 percent after weak US economic data spurred worries over oil demand. The S&P energy index fell 1.2 percent.

The S&P 500 for the first time in a month ended below 2,000, considered a psychological support level, and closed below its 120-day moving average, suggesting more weakness ahead. The CBOE Volatility index notched a fifth day of gains, up 4.2 percent at 22.39.

Expectations for US fourth-quarter earnings have been scaled back sharply, with growth now estimated at 3.5 percent, compared with an Oct. 1 estimate of 11.2 percent, according to Thomson Reuters data.

The S&P financial sector dropped 1.3 percent. Bank of America lost 5.2 percent to $15.20, among the S&P 500's biggest drags, after the second-largest US bank by assets reported a 14 percent slump in quarterly profit. Citigroup shares fell 3.7 percent to $47.23 after its results.

The Dow Jones industrial average fell 106.38 points, or 0.61 percent, to 17,320.71, the S&P 500 lost 18.6 points, or 0.92 percent, to 1,992.67 and the Nasdaq Composite dropped 68.50 points, or 1.48 percent, to 4,570.82.

After the close, S&P 500 e-minis fell further, hitting session lows.

The benchmark S&P 500 is now down 4.7 percent from its Dec. 29 record high.

Adding to volatility, the Swiss National Bank scrapped its cap on the franc currency in a surprise move.

US-traded Swiss stocks climbed. Credit Suisse was up 1.8 percent at $23.22 and Novartis jumped 3.9 percent to $100.58 as a strengthening franc made US-dollar denominated stocks cheaper.

Best Buy shares tumbled 14.1 percent to $34.30 as the worst-performing S&P 500 component. The electronics retailer expects same-store sales growth to be flat to negative in the first two quarters of its fiscal year.

After the bell, shares of Intel dipped 2.1 percent to $35.44 following its results.

In economic news, US producer prices recorded their biggest fall in more than three years in December, while other reports showed mixed signals for manufacturing in New York state and the mid-Atlantic region in January.

About 7.9 billion shares changed hands on US exchanges, above the 7.3 billion average for the last five sessions, according to BATS Global Markets.

NYSE declining issues outnumbered advancers 1,995 to 1,091, for a 1.83-to-1 ratio; on the Nasdaq, 2,152 issues fell and 603 advanced for a 3.57-to-1 ratio.

The S&P 500 posted 27 new 52-week highs and 17 new lows; the Nasdaq Composite recorded 30 new highs and 134 new lows.

In Europe, frantic trading after the Swiss National Bank scrapped its euro cap on the franc drove Swiss stocks down nearly 9 percent, their biggest one-day percentage fall for at least 25 years.

One trader described the central bank's move as "carnage", while Swatch Chief Executive Nick Hayek called the franc's surge in value against the euro an economic "tsunami" for Switzerland, which sells more than 40 percent of its exports to Europe.

Stocks including watchmaker Swatch, luxury goods firm Richemont and cement maker Holcim slumped by between 11 and more than 16 percent as the franc surged against the euro.

Swiss stocks lost some 105 billion Swiss francs of their combined market value or 8.67 percent. The currency moves could, however, have technically led to gains for unhedged dollar investors.

However, other leading stock indexes in Europe rose, with some traders saying the SNB must be expecting an unstoppable tide of euros from the European Central Bank (ECB) through quantitative easing, which is seen as positive for stocks.

"The actual statement from the SNB talks about monetary policy divergence becoming even more pronounced. Reading between the lines, they expect ECB QE to be announced very shortly," Royal London Asset Management's European fund manager, Neil Wilkinson, said.

The pan-European FTSEurofirst 300 index closed 2.9 percent higher at 1,393.41 points, while Britain's FTSE 100 index, Germany's DAX and France's CAC advanced 1.7 to 2.4 percent.

Meanwhile, Japan's Nikkei posted its biggest daily gain in four weeks today after rebounding oil prices eased worries about the global economy and as a pause in the rising yen lifted exporters such as Toyota Motor Corp.

In its best day since December 19, the Nikkei rose 1.9 percent to 17,108.70 points. The broader Topix added 1.4 percent to 1,376.60, and the JPX-Nikkei Index 400 advanced 1.3 percent to 12,483.19.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  

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