By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks fell sharply on Thursday
as investors turned risk-averse amid concerns of stalling growth in
the euro zone and mixed domestic economic data, including reports
on inflation and industrial production.
U.S., U.K. and German government bonds rallied depressing yields
further.
The S&P 500 (SPX) fell 22 points, or 1.2%, to 1,870.08. The
Dow Jones Industrial Average (DJI) dropped 193 points, or 1.2%, to
16,421.25. The Nasdaq Composite (RIXF) shed 49 points, or 1.2%, to
4,051.21.
The Russell 2000 (RUT) index of small stocks fell 16 points, or
1.4% to 1,087.20, officially entering correction territory. It is
down 10% from the peak of 1,208.65, reached on March 4.
Follow MarketWatch's live blog of today's stock-market
action.
"Today's falling prices have more to do with the weak economic
data out of Europe. The picture there is so bleak that the
Germany's Bundesbank is signalling underwriting monetary stimulus,"
said Timothy Leach, chief investment officer, at U.S. Bank Wealth
Management Group.
"Our own economy is improving but very slowly. Combine that with
continued tapering and it is not surprising that markets have moved
sideways this year," he added.
Data on euro-zone first-quarter GDP growth rattled investors
nerves after coming in at a rate of 0.2%, below the expected
0.4%.
Domestic economic reports were mixed. Economy improving faster
than markets and Fed believe.
Consumer prices posted the biggest increase in April since last
summer as the cost of many staples rose, making it harder for
Americans to stretch their paychecks to pay for typical household
expenses.
Applications for weekly unemployment benefits fell sharply for
the second straight week, touching the lowest level since May 2007,
but at least part of the drop probably stemmed from seasonal quirks
tied to a late Easter holiday.
Manufacturers in the New York region said business improved
markedly in early May, suggesting a bounce in activity has finally
arrived. The Philadelphia Fed's manufacturing index retreated
slightly, but not as much as forecast by analysts.
Industrial production dropped in April, as utilities output
tumbled during the month.
Home builders are the most pessimistic they've been in a year,
with makers of new single-family homes reporting fewer sales.
Wal-Mart, Kohl's drop after earnings miss
Retailer company stocks were in focus amid earnings results.
Wal-Mart (WMT) shares fell 2.6% as the company's first-quarter
profit and sales missed expectations.
Shares of Kohl's Corp. (KSS) fell 2.8% as the retailer's
financial results came in below expectations.
Macy's (M), which reported on Wednesday, fell 2.6%. J.C. Penney
Co. Inc. (JCP), scheduled to report after the closing bell, dropped
4.2%. Also reporting after the close is Nordstrom Inc. (JWN) with
shares trading 1.6% lower.
Shares of Cisco Systems Inc. (CSCO) were up 6.9% after the
computer equipment giant topped Wall Street estimates for earnings
and sales.
Shares of ExOne Co. (XONE) fell 15% in late trading after the
3-D printer company posted a first-quarter loss that was bigger
than analysts expected.
European stocks slip
European stocks slipped in the wake of lower-than-expected GDP
data. Growth in Japan, meanwhile, outstripped expectations as the
economy expanded by a robust 5.9% rate in the first quarter. But a
stronger yen pulled Japanese stocks lower, leaving the Nikkei
Average down 0.8%. The Shanghai Composite fell 1.1%. China's
cabinet announced several measures on Thursday to "boost and
stabilize" the country's foreign trade.
Across other markets, crude for June delivery (CLM4) eased
around 94 cents at $101.44, while gold for June delivery (GCM4) was
down $11 at $1,295. The ICE dollar index (DXY) showed the dollar
falling against a basket of six rivals, to 80.05 from 80.060 in
late North American trading on Wednesday.
More must-reads from MarketWatch:
Millennials are not stock-market fans
Stocks are warning of us an approaching bear market
David Tepper: Not saying go short stock market, but 'don't be so
freakin' long'
Subscribe to WSJ: http://online.wsj.com?mod=djnwires