Economic concerns sink stocks for 4th straight day
Tuesday, June 7, 2011
NEW YORK -- Lingering concerns about the U.S. economy pushed the stock market lower for a fourth straight day.
With little new economic data, investors remained focused on Friday's unemployment report.
"Wall Street came back, quickly and very strongly, at a time when the populace was still weak in terms of low job growth and low wage growth," said Daniel Penrod, a senior industry analyst at California Credit Union League. "That appeared to be overly optimistic."
The Dow Jones industrial average fell 61.30 points, or 0.5 percent, to 12,089.96. The Standard & Poor's 500 index dropped 13.99 points, or 1.1 percent, to 1,286.17. It was the first time the S&P index closed below 1,300 since March 23. The Nasdaq composite fell 30.22, or 1.1 percent, to 2,047.39.
Losses came across the stock market. All 10 industry groups in the S&P 500 index fell. Energy and financial companies each lost 2 percent.
A dismal jobs report sent stocks sharply lower on Friday. The Labor Department reported that employers added only 54,000 new workers in May. The unemployment rate inched up to 9.1 percent from 9 percent.
The report reinforced signs that the U.S. economy is slowing. High gas and food prices have cut into consumer spending. The earthquake and tsunami in Japan have slowed down supplies of industrial parts, hurting U.S. manufacturers. The collection of weak economic data prompted many economists to lower their growth projections for the rest of the year.
A proposal that the Federal Reserve may require banks to set aside more cash to cover potential losses pulled financial stocks lower Monday. Citigroup Inc. and Bank of America Corp. each lost more than 4 percent, and JP Morgan Chase dropped 2.5 percent.
Airlines stocks dropped after an industry group cut its profit estimates for this year by half. The group blamed disasters in Japan, unrest in the Middle East and higher fuel prices. Delta Air Lines and AMR Corp., the parent company of American Airlines, each lost more than 3 percent.
Pending regulation and lawsuits sent some companies down more than the overall market. Lorillard Inc. dropped 7 percent, the most of any company in the S&P 500 index. Investors are concerned that the Food and Drug Administration could ban menthol cigarettes. The company makes the most popular menthol cigarette on the market, Newport. Oil field services company Halliburton fell nearly 5 percent after the Supreme Court ruled shareholders can pursue a class-action lawsuit that claimed that company inflated its stock price.
Four stocks fell for every one that rose on the New York Stock Exchange. Consolidated volume came to 3.6 billion shares.