Two disappointing bellwether earnings reports mingled with modestly improved economic data on Thursday to dramatically accelerate Wall Street’s losses from the previous day, as indices tanked across the board.
With separate manufacturing surveys from the Philadelphia Fed and the Empire State Manufacturing index, overall industrial production in the US for the month of July has come out flat, slightly shy of the expected 0.3 percent gain.
Weekly jobless claims, however, dropped to their lowest since 2007, while both consumer prices and homebuilder confidence were shown to have increased. Investors have been jittery about positive economic data in recent months, fearing that consistently better numbers will lead to an earlier start-date for the Federal Reserve’s tapering of stimulus spending.
Meanwhile, continued unrest in Egypt has left a mounting death toll in its wake. Over 600 have now been killed after the army first stormed protest camps in the capital Cairo two days ago. Political instability in the country sent the price of West Texas crude above $107 per barrel.
The Standard & Poor’s 500 dropped 1.43 percent by the end of the day to 1,661.32 points, while the Dow Jones Industrial average was 1.47 percent lower at 15,112.19 points, with the NASDAQ being the day’s biggest loser at 3,606.12, off 1.72 percent.
Tech shares got slammed on the S&P 500 after the release of Cicsco Systems’ ($CSCO) earnings report showed the company just ahead of expectations for the second quarter. The stock tanked, however, after the announcement of 4,000 job cuts as well as a lowered guidance for the rest of the year. Cisco closed over 7 percent lower to end the day at $24.50. Micron Technology ($MU) and Hewlett-Packard ($HPQ) were among a number of techs that ended the day significantly lower.
With only two Dow components ending the day not in the red, the big story was Wal-Mart ($WMT), who closed 2.6 percent lower to $74.41 after the brick-and-mortar discounter released an earnings report that had the company coming in substantially shy of expectations.
Tech shares also led the sell-off on the NASDAQ, with Intel ($INTC), Microsoft ($MSFT), Groupon ($GRPN) and Zynga ($ZNGA) all ending the day lower on heavy trading.
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