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U.S. Stocks Decline on ECB Ahead of Tomorrow’s Jobs Report

Thursday, 05 July 2012 04:11 PM EDT

U.S. stocks retreated, following a three-day advance for the Standard & Poor’s 500 Index, amid disappointment over Europe’s efforts to tame the region’s debt crisis and as investors awaited tomorrow’s jobs report.

Financial shares had the biggest loss among 10 S&P 500 groups as Spanish and Italian bonds plunged. JPMorgan Chase & Co. and Bank of America Corp. fell at least 2.7 percent. A measure of retailers in the benchmark gauge jumped 1.2 percent amid June sales data. Apple Inc., the most valuable company, climbed 2.1 percent to pace gains in technology companies.

The S&P 500 declined 0.2 percent to 1,371.01 at 3:07 p.m. New York time, paring an earlier loss of as much as 0.8 percent. The Dow Jones Industrial Average fell 10.83 points, or 0.1 percent, to 12,932.99. The Nasdaq Composite Index rose 0.2 percent to 2,983.35. Trading in S&P 500 companies was down 22 percent from the 30-day average at this time of day. The U.S. stock market was closed yesterday for a holiday.

“There’s a bit of disappointment with the ECB,” said Mike Ryan, the New York-based chief investment strategist at UBS Wealth Management Americas. “In the U.S., the jobless claims figures were encouraging, but I don’t think they change the dynamics for tomorrow’s data. People are not willing to take big bets going into the jobs report.”

Equities fell as European Central Bank President Mario Draghi said today’s cut in interest rates may have only a limited impact on the euro-area economy. China also lowered rates today in a bid to spur growth. Labor Department data tomorrow may show the pace of hiring accelerated in June while remaining at less than half the average for the first quarter of the year. Data today showed that fewer Americans filed first- time claims for unemployment insurance payments and companies added more workers than forecast.

Concern about a global economic slowdown put the S&P 500 last month on the brink of a so-called correction, or a 10 percent decline from a recent peak. The index slumped 3.3 percent in the second-quarter, the biggest retreat since the period ending in September.

“China is slowing, Europe is clearly slowing, how is the U.S. going to avoid sliding into recession again?” said Malcolm Polley, who oversees about $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania. “There’s just not a lot of capacity left to add stimulus.”

© Copyright 2024 Bloomberg News. All rights reserved.

Thursday, 05 July 2012 04:11 PM
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