Stocks skidded Thursday after a pair of disappointing manufacturing reports fanned worry about the economic recovery.
"My gut instinct is to sell the rally," Dave Rovelli, a trader at Canaccord Adams, said on CNBC this morning, citing economic concerns. "The consumer is already dying," he said, but is incurring higher costs and taxes now.
The Dow Jones Industrial Average was down more than 80 points, following seven straight days of gains.
A one-two punch from the manufacturing sector overshadowed any positive signs on the economy.
First, the NY Fed reported its gauge of manufacturing in the region fell almost 15 pointsto 5.08 in July from 19.57 in June. July's reading was the lowest since December 2009.
Then, the Philadelphia Fed said its gauge of regional manufacturing activity dropped to 5.1 in July, the lowest reading since last summer, from 8 in June. Economists had expected the gauge to tick up to 10, according to a Reuters survey.
Among the morning's other economic data: Jobless claims fell by 29,000 last week to 429,000, the Labor Department reported. And in June, producer prices fell 0.5 percent, while industrial production ticked up 0.1 percent.
Financials were the biggest drag this morning as JPMorganbeat earnings expectations but failed to impress analysts.
Rochdale banking analyst Dick Bove said this wasn't a good reportand that he would've liked to see better revenue from the bank.
And JPMorgan CEO Jamie Dimon delivered a cautious forecast, saying, "It is too early to say how much improvement we will see from here."
Bank of America and Citigroup also declined ahead of results from both banks at the end of the week.
Both banks are expected to post decent results, helped by asset sales, but neither are expected to see an increase in their profits.
Technology stocks dropped more than 1 percent, despite getting a boost yesterday from Intel's results.
Investors also shrugged off another encouraging data point for the tech sector: World-wide personal computer shipments jumped over 22 percent in the second quarter as businesses are increasingly replacing their aging technology, research firm IDC reported.
That helped Dell regain its second-place status in the industry.
"Commercial replacements continue to grow," IDC analyst Bob O'Donnell said. However, O'Donnell said consumer activity has started to slow.
Earnings are due out after the bell today from tech giant Google and Intel rival Advanced Micro Devices.
Google's is expected to report earnings of $6.50 or more, according to the latest estimates, up more than a dollar from the $5.36 a share it earned a year earlier. One analyst said he thinks Google could fall short of Wall Street's expectations but still thinks the stock is a "buy."
Apple shares fell more than 1 percent after the company announced late Wednesday that it will hold a news conference on Friday to talk about the iPhone 4, the subject of many reports about reception problems. Apple wouldn't give further details ahead of the conference, but the buzz on the Internet is that it may recall the phone.
Johnson & Johnson is expected to outline new quality control strategies for regulators today, after repeated recalls of Tylenol and other consumer medicines over the past year.
BP shares rose as the oil giant has begun the test of its new well cap, hoping that it will ultimately wind up stopping the flow of oil in the Gulf for the first time since the explosion that ruptured the well in April.
China's third largest bank, Agricultural Bank, had a weak debut in Shanghaitoday as some pros said the stock was overvalued. Still, one analyst said the reason the stock wasn't in negative territory was became it was a "political task' to keep it above the IPO price. The stock will debut in Hong Kong tomorrow.
On Capitol Hill, the financial-reform bill is nearing the finish line, with the House expected to take the final votes today to send the bill to President Obama for his signature.
Still to Come:
THURSDAY: Yellen nomination hearing; Fed's Lacker speaks; Earnings from Google & AMD after the bell
FRIDAY: CPI; consumer sentiment; Earnings from Bank of America, Citigroup, GE and Gannett
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