NEW YORK REPORT
US stocks fell for a second straight day yesterday and the S&P 500 posted its worst two-day loss since November after reports cast doubt over the health of the US and Eurozone economies.
But a late-day rally helped stocks erase some of their losses with most of the pullback concentrated in the technology- heavy Nasdaq. The move suggested investors were still willing to buy on dips even after the sharp losses in the last session.
In Europe, business activity indexes dealt a blow to hopes that the Eurozone might emerge from recession soon, showing the downturn across the region’s businesses unexpectedly grew worse this month.
“The PMI numbers out of Europe were really a blow to the market,” said Jack De Gan, chief investment officer at Harbor Advisory in Portsmouth, New Hampshire. “The market was expecting signs that recovery is still there, but the numbers just highlighted that the Eurozone problem is still persistent.”
US initial claims for unemployment benefits rose more than expected last week while the Federal Reserve Bank of Philadelphia said its index of business conditions in the US mid-Atlantic region fell in February to the lowest in eight months.
Gains in Wal-Mart Stores shares helped cushion the Dow. The shares gained 1.5 per cent to $70.26 after the world’s largest retailer reported earnings that beat expectations, though early February sales were sluggish.
The Dow Jones industrial average fell 46.92 points, or 0.34 per cent, to 13,880.62 at the close. The Standard & Poor’s 500 Index lost 9.53 points, or 0.63 per cent, to 1,502.42. The Nasdaq Composite Index dropped 32.92 points, or 1.04 per cent, to close at 3,131.49. The two-day decline marked the US stock market’s first sustained pullback this year.