Stocks Skid; Verizon Up on iPhone Rumors
Stocks fell sharply Tuesday amid a fresh round of worries about euro-zone debt and China's growth. A disappointing reading on U.S. consumer confidence sent the market down further.
The Dow Jones Industrial Average was down more than 200 points after a yo-yo session on Monday that left stocks down slightly.
Industrials, financials and techs led the decline, with Boeing , Caterpillar and Bank of America the biggest drags on the Dow.
Intel also fell sharply after a disappointing outlookfrom fellow chip maker Micron Technology .
Shares of Micron were down more than 10 percent after the memory-chip maker delivered decent third-quarter results but reported prices have been stable and sometimes declined in the last month, spurring concerns about the current quarter. Oppenheimer analyst Gary Hsueh said he would've expected double-digit percent growth for the current quarter.
The Philadelphia Stock Exchange semiconductor index was off nearly 5 percent.
Investors were making a flight to safety, with consumer staples stocks the day's best performers.
Treasury prices rose, sending yields down sharply: The 2-year yield hit a record low in overnight trading, while the benchmark 10-year note's yield hit a 14-month low.
This latest round of worries about European debt stems from the fact that bank repayments come due to the European Central Bank this week. European banks must repay 442 billion euros ($545.5 billion) in emergency loans to the ECB on by Thursday.
News about China also weighed on the market: The Conference Board reported its leading indicators for China rose 0.3 percent in April, sharply lower than the 1.7-percent increase it had initially reported. And the IPO for Agbank, China's third largest bank, priced lower than expected at HK$2.88 to HK$3.48 (37 to 39 U.S. cents).
In U.S. economic news, the S&P/Case-Shiller home-price index for 20 metropolitan areas rose 0.4 percent in April amid a final push before the tax credit expired, after sliding 0.2 percent in March. Economists surveyed by Reuters had expected a 0.1-percent decline.
And the Conference Board reported its gauge of consumer confidence fell to 52.9 in June from 62.7 in May, well below the consensus, which called for 62.5.
Verizon was one of the few gainers on the board following a report in Bloomberg that the company may start selling an Apple iPhone using Verizon as the provider as early as January.
Tesla Motors' shares jumped on their debut after the IPO priced at $17 a share last night, above the planned $14-$16 range. A day before, the electric-car maker increased the number of shares for the IPO by 20 percent to 13.3 million.
Citigroup shares resumed trading after being briefly halted after an odd trade that, at one point, sent the stock down 17 percent.
Google will stop automatically redirecting users of its Chinese search engine to its Hong Kong web site, as it tries to avoid a conflict with the Chinese government that could result in losing its license to operate in China.
Barnes & Noble reported a larger quarterly loss for its fourth quarter, compared the same quarter last year, and forecasts another loss for the current quarter. Another earning report of note will come after the closing bell this afternoon, when food-maker General Mills reports its latest quarterly numbers.
The death of Senator Robert Byrd (D-West Virginia) over the weekend may delay final action on the financial regulation reform bill until mid-July, according to political experts. The House is expected to approve the legislation as early as tonight, but the absence of Byrd's key vote may delay Senate approval.
BP was among the only stocks higher today, up more than 2 percent. Tropical Storm Alex is set to strengthen into a hurricane today, which could impact efforts to contain the massive Gulf oil spill.
US-traded sahres of generic drug maker Teva were also higher, up about 1 percent, after Bayer withdrew one lawsuit agains the Israeli company over alleged paten infringement's on Bayer's oral contraceptive Yaz. However, Teva said it will still continue to pursue some charges against the company.
TUESDAY: Consumer confidence; Tesla shares debut
WEDNESDAY: FCIC hearing; weekly mortgage apps; ADP employment survey; weekly crude inventories; Fed's Lockhart speaks
THURSDAY: Weekly jobless claims; ISM manufacturing index; construction spending; pending-home sales; June auto sales
FRIDAY: June jobs report; factory orders
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