BLBG: U.S. Stocks Fall on Jobless Claims, Prices Data; Banks Slump
U.S. stocks fell for a second day as concern grew that Bank of America Corp. will need more government aid, while reports showed declining producer prices and an increase in initial jobless claims.
Bank of America Corp., the biggest U.S. bank by assets, plunged 19 percent, and Citigroup Inc. slumped 13 percent. Apple Inc. tumbled 4.8 percent on Chief Executive Officer Steve Jobs’s plan to take a medical leave of absence. JPMorgan, the second- biggest U.S. bank by assets, rallied 4 percent after reporting fourth-quarter profit of $702 million.
The Standard & Poor’s 500 Index retreated 1.2 percent to 832.51 as of 9:59 a.m. in New York. The Dow Jones Industrial Average fell 80.52 points, or 1 percent, to 8,119.62. The Russell 2000 Index slipped 0.8 percent.
“The economic environment and news is the most important factor for the market right now, and it’s not a positive,” said Dean Gulis, part of a group that manages about $2.5 billion for Loomis Sayles & Co. in Bloomfield Hills, Michigan. “Unemployment will continue to rise for some time. It reinforces the sense of overall weakness.”
All 10 industry groups in the S&P 500 retreated after producer prices capped the first annual decrease in seven years and first-time claims for unemployment benefits jumped by 54,000. U.S. stocks yesterday slid the most in six weeks after retail sales decreased at more than twice the rate forecast by economists.
The S&P 500 has dropped 7.1 percent in 2009 as companies from Alcoa Inc. to Intel Corp. spurred concern earnings will deteriorate amid the recession, while the unemployment rate in the U.S. climbed to the highest level in almost 16 years.
Apple, Bank of America
Apple lost $4.10 to $81.23. Chief Operating Officer Tim Cook, who filled in during Jobs’s 2004 medical leave, has taken over Apple’s day-to-day operations, the company said. Jobs said he will remain involved in major strategic decisions.
Bank of America fell $1.89 to $8.31. Details of government aid are likely to be disclosed on Jan. 20, the people said. That’s when Bank of America may post its first quarterly loss in 17 years as it digests the purchases of Merrill Lynch and Countrywide Financial Corp. The combined company has already received $25 billion from the U.S.
Citigroup slid 60 cents to $3.93.
U.S. foreclosure filings jumped 81 percent last year to more than 2.3 million as falling house prices, tighter mortgage lending and the longest recession in a quarter century battered property owners, RealtyTrac Inc. said.
