Wall St falls for second day as job fears grow

US stocks fell for a second day yesterday as labour market data showed more signs of weakness, while a warning from Qualcomm and poor results from Stanley Black & Decker also discouraged investors.

A late bounce cut the losses of the Dow and the S&P 500 nearly in half.

Apple shares, down 3.4 per cent, also contributed to the day’s losses, as did renewed concerns about Europe’s finances. Apple closed at $587.44.

Spanish government bond yields rose after a disappointing debt auction and French bond yields rose on rumors, later denied, that the country’s credit rating may be downgraded.

Qualcomm led technology stocks lower with a 6.6 per cent drop a day after it warned of trouble meeting demand for some of its chips, while Stanley Black & Decker fell 7.1 per cent to lead declines among industrials, the second-worst performing of the top 10 S&P 500 sectors.

The losses came amid a strong beginning to earnings season, confirmed yesterday by better-than-expected reports from Bank of America and Morgan Stanley.

Of the 105 S&P 500 components that have reported earnings to date, 81.9 per cent have beaten analysts’ expectations, according to Thomson Reuters data.

“Despite the positive beat rate in earnings, some important economic data points have been losing momentum and that has to call into question whether or not this is just a soft patch or something more dramatic,” said Quincy Krosby, market strategist at Prudential Financial. “You overlay that with Europe again dominating the headlines ... it just has investors standing on the sidelines,” she said.

Raising concerns about the economic outlook, new US claims for unemployment benefits slipped in the latest week but were well above expectations, the Labor Department reported. Other reports showed factory activity in the Mid-Atlantic region slowed sharply and existing home sales dropped in March for a second straight month.

The Dow Jones industrial average fell 68.65 points, or 0.53 per cent, to end at 12,964.10. The S&P 500 Index dropped 8.22 points, or 0.59 per cent, to 1,376.92. The Nasdaq Composite lost 23.89 points, or 0.79 per cent, to 3,007.56. At their session lows, the three major indexes all fell more than one per cent.

After the closing bell, Microsoft reported a slight drop in fiscal third-quarter profit and a 6 per cent jump in sales. Microsoft’s stock rose 2.5 per cent to $31.78 in extended-hours trading. During the regular session, eBay jumped 13.2 per cent to $40.62 a day after the online auctioneer reported that its quarterly sales and profit grew more than expected. Bank of America, fell 1.7 per cent to $8.77 after spending the morning higher. In contrast, Morgan Stanley rose 2.3 per cent to $18.07.