By Donna Kardos Yesalavich
NEW YORK (Dow Jones) -- U.S. stocks fell Thursday despite
better-than-expected reports on jobs and durable-goods orders, as
worries about the global economy persisted.
The Dow Jones Industrial Average (DJI) was down 44 points, or
0.5%, to 10254, in early trading. Pfizer (PFE) was the measure's
worst performer with a drop of 1.9%. The drug company said it would
suspend osteoarthritis trials of its pain drug tanezumab after a
"small number" of reports that patients' ailments worsened to the
point of needing joint replacement. The company said the suspension
followed a request by the Food and Drug Administration.
The Dow's financial components were also particularly weak. J.P.
Morgan Chase (JPM) dropped 1.4% and Bank of America (BAC) declined
1.2%. The measure's top decliners also included Home Depot (HD),
which fell 1.3%, and Alcoa (AA), which dropped 1.2%.
Just two of the Dow's 30 components managed to eke out gains:
Microsoft (MSFT) rose 0.9% and United Technologies (UTX) edged up
0.1%.
The Nasdaq Composite (RIXF) declined 0.5% to 2243. The Standard
& Poor's 500 (SPX) slipped 0.5% to 1087, with its financial and
consumer-discretionary sectors leading the drop.
The drop came despite a bigger-than-expected drop in weekly
jobless claims. Initial claims for jobless benefits fell by 19,000
to 457,000 in the week ended June 19, while economists had expected
claims would fall by only 7,000.
Separately, the Commerce Department said durable-goods orders
decreased by 1.1% to a seasonally adjusted $192.01 billion, but
that was smaller than the 1.5% decline economists predicted. The
number was weighed down by a 30% plunge in non-defense aircraft and
parts that followed a 216% surge in April. Outside of the
transportation sector, orders for all other durables rose by 0.9%
in May, with gains in metals, machinery and computers.
However, investors continued to worry about the economy a day
after the Federal Reserve's policy-making body kept its key
interest rate near zero, as expected, but cast its policy statement
with more downbeat language. "Financial conditions have become less
supportive of economic growth on balance, largely reflecting
developments abroad," namely in Europe, the central bank said in
its Wednesday statement.
Worries about Europe's economy come as Chancellor Angela Merkel
roundly rebuffed U.S. President Barack Obama's call for Germans to
aid the global recovery by spending more and relying less on
exports, even as she warned that Europe's own financial crisis is
far from over. In an interview with The Wall Street Journal in her
Berlin chancellery, Merkel said the nations that share the
beleaguered euro have merely bought some time to fix the flaws in
their monetary union.
Meanwhile, the cost of insuring Greek sovereign debt against
default rose further to hit another record early Thursday,
according to data provider CMA DataVision.
The euro fell against the dollar, trading at $1.2290. The U.S.
Dollar Index, reflecting the U.S. currency against a basket of six
others, rose 0.1%. Treasurys also rose, pushing the yield on the
10-year note down to 3.09%, as investors moved toward safer assets.
Crude-oil futures fell to nearly $76 a barrel while gold futures
also declined.
Among stocks in focus, Apple (AAPL) edged up 0.7%. The company
started selling the iPhone 4, the latest version of its popular
smartphone, on Thursday morning to teeming crowds of eager Asian
and European consumers--including some who waited three days to be
among the first in the world to purchase the new handset.
Lennar (LEN) dropped 0.9%. The home builder swung to a fiscal
second-quarter profit, easily beating analysts' estimates, helped
by higher revenue. However, orders and deliveries fell.
Hasbro (HAS) shares were halted. Private-equity firm Providence
Equity Partners is in preliminary discussions with the toymaker to
take the company private in a leveraged buyout, people familiar
with the matter said. Hasbro has a market capitalization of about
$6 billion and a leveraged buyout of the S&P 500 company, which
owns the G.I. Joe, Transformers and Nerf brands, would be the
year's largest private-equity deal.