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Dow Closes Below 13,000; Apple Slumps 3%

Thursday, 19 Apr 2012 | 4:40 PM ET

Stocks eased off their worst levels but still finished lower Thursday, following a volatile start, as investors remained on edge after some disappointing economic reports and amid jitters in the euro zone.

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The Dow Jones Industrial Average slumped 68.65 points, or 0.53 percent, to close at 12,964.10, below the psychologically-important 13,000 milestone, led by Alcoa and McDonald's.

The blue-chip index was down more than 130 points at its worst level.

The S&P 500 erased 8.22 points, or 0.59 percent, to finish at 1,376.92. The Nasdaq dropped 23.89 points, or 0.79 percent, to end at 3,007.56.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended below 19.

Most S&P sectors ended in the red, led by techs and industrials.

“We’ve seen almost every single U.S. data in the last couple of weeks softer than expected… and now we’re in this lull between the end of that QE and what will potentially be another QE,” said Peter Boockvar, equity strategist and portfolio manager at Miller Tabak & Co. on CNBC’s “Power Lunch.” “So in this environment of QE and not-QE, It’s tough to say that it’s a bull market type of environment; it’s more of a trading environment.”

On the economic front, jobless claims slipped far less than expected to a seasonally adjusted 386,000 last week, which was less than expected, according to the Labor Department. The four-week moving average for new claims rose 5,500 to 374,750.

Adding to woes, existing home sales slipped2.6 percent to an annual rate of 4.48 million units in March. And the Philadelphia Fed index of business conditions for April came in at 8.5, well below forecasts.

Meanwhile, leading indicators touched its highest level in nearly four years, increasing 0.3 percent to 95.7 in March, its sixth-straight month of gains.

Threats to Recovery?
Discussing Thursday morning's major economic reports, including jobless claims and existing home sales, with Mark Zandi, Moody's Analytics chief economist.

Among earnings, financial giants Bank of America and Morgan Stanley both posted earnings that were above expectations. BofA CEO Bryan Moynihan said the mortgage business has reached a bottom and is ready for an upturn, while Morgan Stanley's CEO James Gorman told CNBC's "Squawk on the Street" that it's been a “long and arduous” journey, but the firm is on the right track.

Elsewhere, Verizon and Du Pont also posted earnings beats. In addition, fellow Dow component Travelers , also easily topped expectations.

Microsoft, AMD and Capital One are among companies scheduled to report after the closing bell on Thursday.

“A lot of [good earnings news] has already been baked into the market so an upside result is not much of a surprise,” said Brian Gendreau, market strategist at Cetera Financial Group. “Europe is much more of a concern at this point.”

Meanwhile, McDonald's slumped to lead the Dow laggards following a note from Lazard Capital saying the fast-food chain is likely to miss results Friday.

European shares closed loweramid the ongoing jitters over the region's sovereign debt issues in addition to unconfirmed rumors over a credit-rating downgrade for France ahead of the upcoming presidential elections. Earlier, Spain’s 2.5 billion euro ($3.3 billion) auctions of 2- and 10-year sovereign bonds were met with solid demand.

“I think the most recent factor is [Secretary of State Hillary] Clinton’s comments about Turkey,” said Art Cashin, director of floor operations at UBS Financial Services. “She said they may invoke their status as a NATO member because of the shelling coming in from Syria. Then NATO would come to their defense. The rest of it is spillover from Europe and economic news was lousy.”

Among techs, Ebay surged, seeing its best one-day gain since October 2008, after the online auction company's quarterly results topped estimates and at least 13 brokerages boosted their price target on the firm.

Seven major tech giants including Apple , Google and Intel were ordered by a judge to face an antitrust lawsuit claiming they illegally conspired not to poach each other's employees.

Separately, concerns that Apple may miss its second quarter iPhone targets weighed on the stock. The iPhone maker's stock is down nearly 9 percent from its intraday high on April 10.

Sprint slumped after New York Attorney General Eric Schneiderman sued the wireless communication firm for more than $300 million, accusing the company of tax fraud.

Gilead Sciences surged after an experimental hepatitis C drug acquired by the biotech company produced encouraging results in a clinical trial.

Also on the biotech front, Human Genome Sciences skyrocketed after the company rejected an offer worth around $2.6 billionfrom GlaxoSmithKline .

Tumi jumped more than 40 percent in its market debut. The luxury luggage maker priced its offering of 18.8 million shares at $18, above its expected range of $15 to $17 each. And Splunk also soared sharply in its market debut after the the data analytics software maker priced its IPO significantly above its indicated price range.

—Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC

Coming Up This Week:

FRIDAY: Earnings from GE, McDonald's, Schlumberger

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