WSJ: US Stocks Decline As European, U.S. Debt Spur Caution
By Brendan Conway and Tomi Kilgore
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--U.S. stocks fell in early trading Monday, as the combination of euro-zone debt anxieties and a lack of progress in U.S. debt-ceiling negotiations kept traders cautious.
The Dow Jones Industrial Average shed 78 points, or 0.6%, to 12401, led lower by Caterpillar and Bank of America, which each shed 1.2%. The Standard & Poor's 500 stock index fell 7 points, or 0.6%, to 1309. The Nasdaq Composite slid 13 points, or 0.5%, to 2777.
The blue-chip Dow is coming off its worst week since the one ending June 10. The index dropped 1.4% last week after ratings-agency warnings on U.S. debt and weaker economic data kept investor sentiment in check. It was the eighth decline in 11 weeks.
Investors seeking a safe harbor Monday pushed gold to nearly $1603 an ounce, though the metal gave back some ground and traded under $1600 recently. The gain puts the precious metal on track for a 10th-straight rise and another record settlement. The U.S. dollar strengthened against both the euro and the yen. Crude-oil prices fell near $96 a barrel.
European markets declined as continued worries about euro-zone sovereign debt trumped generally positive results from the stress tests of European banks Friday.
In the U.S., there were few signs of a breakthrough in debt negotiations. Senate leaders are planning this week to unveil a back-up plan that includes more budget wrangling by the end of the year, the Wall Street Journal reported.
The earnings reporting season was in full swing. Halliburton gained 1.5% after the energy-services company reported second-quarter earnings and revenue that topped forecasts. Hasbro shed 3.3% after adjusted second-quarter earnings fell short of analyst estimates.
WebMD slumped 24%. The company cut its guidance for the current year and gave a weak third-quarter outlook, citing delays in sponsorhip programs.
Check Point Software Technologies rose 3.2% after the company's second-quarter earnings jumped 24%.
Blue-chip technology company International Business Machines, which reports results after the closing bell, were flat.
LinkedIn fell 3.3%. J.P. Morgan Chase analysts downgraded their investment rating on the stock to "neutral" from "overweight," citing valuation.
The economic calendar is relatively light Monday, with a reading on home builders' confidence in July scheduled for release at 10 a.m. Eastern time.
-By Brendan Conway, Dow Jones Newswires; (212) 416-2670; brendan.conway@dowjones.com
