Wall Street began Thursday at a deficit after the Japanese Nikkei Stock Average tanked more than 7 percent overnight, before rebounding off of positive housing data that was released later on in the morning.
The Nikkei was hit with its worst loss in over two years as bond yields jumped and the yen was up, prompting a frantic sell-off on Japanese markets. The resulting unease was compounded by weaker than expected Chinese manufacturing data, as well as Wednesday’s release of the minutes of the latest FOMC meeting that contained the most substantial discussion to date regarding the timing of the inevitable drawdown of the Federal Reserve’s asset and bond purchases.
The Commerce Department saved the day somewhat when it said that sales of new homes in the U.S. were up for the month of April, to a seasonally adjusted annual rate of 454,000 and well ahead of expectations of around 430,000. The April figure is a 23 percent gain on the prior year period.
The Dow dropped as much as 127 points from its previous close early in the day before crawling its way back to 15,294.50 for a slight loss of 0.08 percent. Aluminium manufacturer Alcoa Inc. (AA) lost 1.73 percent to close at $8.54 per share, while Johnson & Johnson (JNJ) was down 1.41 percent to $87.21, and Microsoft (MSFT) dropped 1.33 percent to $34.15.
Former PC leader Hewlett-Packard (HPQ) was the Dow’s bright spot, leaping over 17 percent to $24.86 after Wednesday’s earnings report showed signs that the company is prepared to embrace the momentous changes currently taking place in tech markets.
The S&P 500 dropped 0.29 percent to 1,650.51 points, with a number of REITs contributing to the index’s losses. Health care facilities REITs HCP Inc. (HCP) and Health Care REIT Inc. (HCN) were down 4.25 percent to $51.88 and 3.84 percent to $74.32 respectively, followed by financial REIT Ventas Inc. (VTR), down 3.27 percent to $78.07, and industrial REIT Prologis Inc. (PLD) down 2.57 percent to $42.38. Macerich Co. (MAC) and Wornado Realty Trust (VNO) were also down over 2 percent on the day.
On the upside, Electronic Arts (EA) gained 4.14 percent to close at $22.56 on news that the company’s mobile division will be making many more of its games available through Samsung’s Galaxy S4.
The Nasdaq dropped 0.11 percent to end the day at 15,294.50 points, with Cirrus Logic (CRUS) one of the day’s biggest losers, down 19.53 percent to $17.76 after the company’s reduction of its longer-term margin guidance sparked fears that it is being overtaken by the competition. Carl Icahn’s Icahn Enterprises LP (IEP) was down 5.39 percent to $81.31, and Green Mountain Coffee Roasters (GMRC) dropped 4.35 percent to close at $72.93 per share.
Notable performances on the Nasdaq came from youth apparel retailer rue21 Inc. (RUE), up 23 percent to $41.96 after word surfaced that the company had made a tentative agreement to a buyout deal with the firm Apax Partners. Online real-estate network Zillow (Z) advanced almost 5 percent to close at $57.61 on the day’s good housing news.