Specialists Frank Masello, left, and John T. O'Hara work on the trading floor of the New York Stock Exchange in New York shortly before the closing bell on Friday, June 29, 2012. Financial markets around the world stormed higher Friday after European leaders came up with a breakthrough plan to rescue banks, relieve debt-burdened governments and restore investor confidence. The Dow Jones industrial average climbed 277 points, and the Standard & Poor's 500 index had its best day of the year. Stocks advanced even further in Europe, in strong and weak countries alike. (AP Photo/David Karp)
Specialists Frank Masello, left, and John T. O'Hara work on the trading floor of the New York Stock Exchange in New York shortly before the closing bell on Friday, June 29, 2012. Financial markets around the world stormed higher Friday after European leaders came up with a breakthrough plan to rescue banks, relieve debt-burdened governments and restore investor confidence. The Dow Jones industrial average climbed 277 points, and the Standard & Poor's 500 index had its best day of the year. Stocks advanced even further in Europe, in strong and weak countries alike. (AP Photo/David Karp)
NEW YORK (AP) ? Investors rejoiced over Europe last week. On Monday, they got back to worrying about the United States.
Stocks sank after a business group reported that American manufacturing shrank in June for the first time in almost three years. The Dow Jones industrial average dropped 62 points to 12,818 at midday.
Chemical company DuPont fell the most of the 30 companies in the Dow. It was down $1.83, or 3.6 percent, to $48.74. Caterpillar, General Electric, Alcoa, Exxon Mobil, Boeing and other companies closely tied to manufacturing were also down.
It was the first day of trading of the second half of the year. U.S. stocks finished the first half up more than 8 percent.
Stocks wavered between small gains and losses before Monday's manufacturing report. The government reported a sliver of good news: U.S. construction spending rose in May by 0.9 percent, the most in five months.
But that was not enough to outweigh the more recent manufacturing report. The Standard & Poor's 500 was down five points to 1,357. The Nasdaq composite was down five to 2,930.
"There's just a lot of bad news," said Leo Grohowski, chief investment officer of Bank of New York Mellon's wealth management division. The market, he said, "is going to continue to move from hope to despair."
On Friday, world stocks soared after European leaders announced a plan to make bailouts easier for troubled banks and relieved governments crippled by debt. The Dow gained 277 points, and the S&P had its best day of the year.
On Monday, major indexes in Europe added to their gains from despite the news about U.S. manufacturing. Stocks were up 1.2 percent in Germany, 1.4 percent in Germany and 0.3 percent in Spain.
Previous steps to ease the debt crisis in Europe have been met by market gains that quickly disappeared. The gains Monday were a sign that investors are more convinced that this plan will work.
But the day also brought reminders of how badly Europe needs help: Unemployment in the 17 countries that use the euro is at the highest level since the euro was launched in 1999.
In France, auditors warned that the country still has a big budget hole to plug. In Cyprus, leaders prepared for talks on its own bailout. And in Germany, the highest court announced it would hear arguments from people who want to block the rescue.
The European Central Bank will meet later this week to decide whether to cut interest rates.
Grohowski said that the best he was hoping for, both for the U.S. and for Europe, was a "two steps forward, one step back" economic recovery.
U.S. car companies report monthly sales Tuesday, retailers like Target and Macy's report monthly sales on Thursday, and a closely watched report on U.S. jobs comes out Friday.
Grohowski said he expects swings in the market at least through the U.S. election in November, as investors wait for more certainty on the direction of the U.S., the crisis in Europe and a slowdown in China. Chinese manufacturing in June grew at the slowest pace in seven months.
In corporate news:
? Bank of America fell 2.4 percent. It and other big banks are supposed to submit "living wills" Monday outlining for the government how they would unwind if they were close to failing.
? Best Buy jumped 10 percent after reports that its founder was close to making an offer to buy the company and take it private. Best Buy, an electronics store, has struggled to keep up with online-only competitors like Amazon.
? Groupon fell more than 8 percent after analysts at Susquehanna cut their price target for the company, noting higher marketing expenses.
Associated Pressbroncos broncos lehigh walking dead season finale matt flynn denver news frozen planet
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.