Stocks Slip Again on Fears About United
Stocks fell Thursday for the fifth straight session as fears about an expected bankruptcy filing by United Airlines and tepid holiday retail sales renewed doubts over whether the two-month rally can survive.
The Dow Jones industrials slid more than 110 points, although trading was light as a snowstorm pelted the East Coast.
“The United Airlines news has got the market a little spooked,” Todd Clark, head of listed equity trading at Wells Fargo Securities, told Associated Press. “We’re seeing weakness in the financial stocks, part of it due to their exposure to United Airlines bonds.”
The 30-stock Dow Jones industrial average dropped 114.57 points, or 1.3%, to close at 8,623.28, and broader indexes also fell. The Standard & Poor’s 500 declined 11.02 points, or 1.2%, to 906.55, and the tech-heavy Nasdaq composite fell 19.60 points, or 1.4%, to 1,410.75.
Losers topped winners by about 3 to 2 on the New York Stock Exchange and Nasdaq.
Treasury bond yields eased as traders reacted to reports of soft November retail sales, which stoked concerns about the health of the economic recovery. The yield on the benchmark 10-year T-note eased to 4.14%, from 4.15% on Wednesday.
Investors were unmoved by a Labor Department report showing that new claims for unemployment benefits fell last week by a seasonally adjusted 13,000, to 355,000. It was the lowest level since February 2001, offering hope to workers as they move into the holiday shopping season, but analysts noted that overall the economic data remained a mixed bag.
Among Thursday’s stocks on the move, United parent UAL plunged $2.12 to $1 after the federal government rejected the airline’s request for a $1.8-billion loan guarantee. The decision prompted Dow Jones to yank UAL from its Dow transportation average, replacing it with United Parcel Service.
Boeing fell 97 cents to $32.96 as United’s troubles sparked concerns over product demand in the battered commercial aerospace market. Among engine makers, United Technologies lost $1.59 to $61.16 and General Electric slid 72 cents to $25.80.
Some rivals of United Airlines rallied, however, among them American Airlines’ parent, AMR, which gained 54 cents to $7.58.
In other highlights:
* Financial stocks fell after Merrill Lynch cut its rating on banks and brokers and as investors fretted about the ripple effect of a United bankruptcy filing. Morgan Stanley slipped $1.62 to $42.40, Goldman Sachs lost $1.90 to $74.45, and Citigroup fell 71 cents to $37.14.
* Retailing stocks mostly fell as Wal-Mart Stores and others posted monthly sales tallies at the low end of forecasts. Wal-Mart lost $1.42 to $53.02, Abercrombie & Fitch slid $1.50 to $22.31, and Costco Wholesale dropped $1.15 to $31.10.
Elsewhere in the sector, American Eagle Outfitters lost $3.12 to $15.87 after falling shy of sales estimates, and mail-order house J. Jill Group sank $6.49 to $16.52 after cutting its fourth-quarter earnings estimates.
* Among big tech names, chip maker Intel declined 78 cents to $18.98 ahead of its mid-quarter update late Thursday, but the shares rose modestly in after-hours trading after the company raised sales guidance.
Competitor Advanced Micro Devices gained 40 cents to $8.25 after raising its fourth-quarter sales outlook.
Market Roundup, C7-8
