Monday, Apr 23, 2018
One of America's Great Newspapers ~ Toledo, Ohio

Stock Market

Stocks open lower as financial turmoil grips Spain, a reminder of Europe's debt crisis

NEW YORK — Stocks fell Thursday for the third day in a row, daunted by reminders that Europe has not solved its debt crisis and the U.S. economy is far from healed, despite progress on both fronts.

The Dow Jones industrial average fell 72 points by mid-morning to 13,056. The broader Standard & Poor's 500 fell 11 points to 1,394. The Nasdaq composite index fell 23 to 3,082.

The declines came despite incrementally good news about the U.S. economy. The government said that the number of people seeking unemployment benefits last week dropped by 5,000 to about 359,000, the lowest since April 2008

The government also said that the U.S. economy grew at an annual rate of 3 percent in the fourth quarter, which met analysts' expectations and was the fastest pace since spring 2010.

But there was reason for concern, too: The government said that many more people than it originally estimated filed unemployment claims in recent months. And economists believe the country's growth has now slowed to about 1.5 percent.

The market's rally this year has been driven by improvement in the U.S. economy. Now, "investors are pausing to examine whether the growth is real," said Lawrence Creatura, a Rochester, N.Y., portfolio manager at Federated Investors.

Investors also may be waiting to see companies' earnings for the first three months of the year. The earnings season traditionally kicks off with Alcoa, which reports April 10.

"We're in that odd period of silence," Creatura said. "It's like a bad Western movie where one guy turns to the other and says, 'It's quiet out here,' and the other says, 'Yeah, too quiet.' That's what today feels like it."

The yield on the 10-year Treasury note fell to 2.16 percent from 2.21 percent. The yield often drops when more people put their money into the perceived safety of bonds, which can be a sign they are pessimistic about the economy.

European markets fell across the board, despite a report from Germany that its unemployment rate fell slightly over the month. The benchmark stock index was down 1.9 percent in Germany and 1.3 percent apiece in France and Britain.

Though Greece is no longer on the brink of default, deep problems remain for the continent, where stronger countries are arguing that they shouldn't have to bail out weaker ones.

In Spain, workers took to the streets to protest government spending cuts, underscoring the difficulty that governments will have in reining in overblown spending.

The price of oil fell 65 cents per barrel in New York to $104.73, but that's small relief for Americans who are paying an average of $3.92 per gallon. Investors worry that the high prices could stunt the economy's plodding recovery.

France's prime minister said there's a "good chance" the U.S. and Europe will release oil reserves, which could drive down prices by adding supply. President Barack Obama was expected later Thursday to call on Congress to end tax breaks for oil companies. The price of oil has doubled since October, and the price of gasoline has risen about 20 percent this year.

Among the stocks making big moves:

— Illumina, a diagnostics company, rose nearly 4 percent to $52.06 after the Swiss pharmaceutical giant Roche Group raised its offer for the company to $51 per share.

Best Buy fell more than 8 percent after announcing big spending cuts, including plans to close 50 of its big-box stores.

— JetBlue fell more than 7 percent, two days after passengers said a pilot came unhinged and forced a JetBlue flight to make an emergency landing on a flight from New York to Las Vegas. The stock decline could also be related to higher oil prices, which cut into airline profits.

Click to comment

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem?

Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet.

Copyright © 2018 Toledo Blade

To Top

Fetching stories…