BLBG: U.S. Stocks Decline As ECB Overshadows Jobless Claims
U.S. stocks retreated, snapping a three-day advance for the Standard & Poor’s 500 Index, as optimism with jobless claims data fizzled after European Central Bank President Mario Draghi said economic risks remain.
JPMorgan Chase & Co. and Chevron Corp. dropped at least 0.9 percent to pace losses in the largest companies. A gauge of S&P 500 retailers gained 0.5 percent amid June sales data.
The S&P 500 declined 0.4 percent to 1,368.99 at 9:43 a.m. New York time. The Dow Jones Industrial Average dropped 62.74 points, or 0.5 percent, to 12,881.08. The market was closed yesterday for a holiday. Trading in S&P 500 companies was down 13 percent from the 30-day average at this time of day.
“There’s a bit of disappointment with the ECB as Draghi continues to focus on the downside risks,” Mike Ryan, the New York-based chief investment strategist at UBS Wealth Management Americas, said in a telephone interview. “Meantime, people are not willing to take big bets going into the jobs report.”
Equities fell as Draghi said some risks to growth have “materialized.” Both the ECB and China announced interest rate cuts today in a bid to spur growth. Earlier gains were driven by data showing that fewer Americans than forecast filed first-time claims for unemployment insurance payments last week, while companies in the U.S. added more workers than forecast in June. Both the ECB and China announced interest rate cuts today.
Investors also awaited tomorrow’s jobs report, which may show the weakest quarter for employment in more than two years. The jobless rate, which has exceeded 8 percent for 40 consecutive months, may have held at 8.2 percent in June.
Economic Concern
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.”
Nine of 10 groups in the S&P 500 retreated as financial and commodity shares had the biggest losses.
To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Julia Leite in New York at jleite3@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
