Stocks tumble as market sees worst day in three weeks
Traders work on the floor of the New York Stock Exchange.
Updated at 2:15 p.m. ET: Stocks fell sharply mid-session Thursday after some downbeat economic reports worried investors. It was the market’s worst daily performance in three weeks.
The Dow Jones industrial average was lately down over 200 points.
The Philadelphia division of the Federal Reserve reported that manufacturing in the Northeastern U.S. region fell sharply this month, recording its worst reading since last August.
Also, Labor Department data showed the number of Americans filing new claims for unemployment benefits fell just a little last week to 387,000, while a monthly indicator of China’s manufacturing activity fell to a seven-month low of 48.1.
A separate report showed home resales fell in May and the median sales price rose only because of a drop in sale of lower priced homes, casting a shadow on the country’s nascent housing market recovery.
Earlier, shares in Europe turned positive after Spanish government bond yields eased, relieving markets after the country raised over two billion euros at a debt auction, albeit with a sharp rise in borrowing costs.
Madrid is expected to shed light on the dire state of its weaker banks and possibly makes a formal request for European Union funds to rescue them.
“We don’t have earnings, we don’t have a major economic release, we don’t have the Fed and the Greek elections are in place,” said Peter Kenny, managing director at Knight Capital In Jersey City, New Jersey.
“Now the focus shifts and it’s China and Spain — you have concerns over the world’s growth engine slowing, and concerns over the next target in the EU and how that gets addressed.”
The Dow and S&P ended the prior session down slightly after the Federal Reserve delivered another round of monetary stimulus and said it was ready to do more to help a U.S. economic recovery that looks increasingly fragile, but refrained from announcing a third shot of quantitative easing.
The benchmark S&P 500 index had risen for four straight session in anticipation of more stimulus measures.
Philip Morris International Inc fell after revising its full year 2012 forecast, following in the footsteps of fellow large-cap multinationals PepsiCo and Procter & Gamble.
Onyxx Pharmaceuticals Inc surged after U.S. drug advisers backed the company’s drug for patients who have failed to successfully treat their blood cancer with other medicines. Ligand Pharmaceuticals Inc, which stands to receive royalties from sales of the drug, gained.
ConAgra Foods Inc advanced after it reported a quarterly net loss compared with a year-earlier profit, hurt by a change in accounting for pensions.
Celgene Corp slumped after the company said it was withdrawing a European application for wider use of its big-selling Revlimid blood cancer drug.
Reuters contributed to this report.
Ben Willis, Sunrise Securities, shares the buzz on trading.