Shares drop for fourth straight day on Wall St
US stocks fell for a fourth day yesterday after European Central Bank President Mario Draghi disappointed investors hoping for immediate action to contain the Eurozone debt crisis.
One of Wall Street’s top market makers, Knight Capital Group, was fighting for its survival after a trading glitch that roiled markets on Wednesday wiped out $440m the firm’s capital.
However, the market focused mostly on the ECB, though traders were also looking ahead to today’s closely watched US jobs report which could bring a volatile end to an eventful week.
Markets rallied late last week in part on hopes for stimulus from the Federal Reserve but mostly as expectations grew the ECB would take action to protect the euro. Friday’s jobs report could give a stronger indication whether the Fed, which has a freer hand than the ECB, will act shortly.
Data showed the number of Americans filing new claims for jobless benefits rose last week and manufacturers suffered an unexpected drop in orders in June, suggesting the economy is struggling to break out of a soft patch.
The Dow Jones industrial average fell 92.18 points, or 0.71 per cent, to 12,878.88. The S&P 500 Index dropped 10.14 points, or 0.74 per cent, to 1,365.00. The Nasdaq Composite lost 10.44 points, or 0.36 per cent, to 2,909.77.
Major indexes fell for a fourth day running, totaling weekly losses so far of more than 1.5 per cent.
Knight Capital shares fell after Wednesday’s trading error forced the company to seek new funding. The stock closed down 62.8 per cent at $2.58, their lowest since early October 1998.
According to Thomson Reuters data, 67 per cent of the 385 S&P 500 components that have reported results so far this quarter have beat earnings estimates. In the past four quarters, the average beat rate has been 68 per cent.
General Motors posted a smaller-than-expected loss in Europe that helped the No. 1 U.S. automaker post a better-than-expected second-quarter profit. Shares slipped 2.6 per cent to $19.14.
Gap jumped 12.8 per cent to $33.17 after the clothing retailer posted its July and second-quarter sales, but rival Aeropostale plummeted 32.8 per cent to $13.08 after cutting its second-quarter forecast.
US retailers reported stronger-than-expected sales for July but the gains were largely due to discounting and do not necessarily signal vigorous consumer spending for the rest of the year.
About 7.1bn shares exchanged hands on the New York Stock Exchange, NYSE MKT and Nasdaq, above the year-to-date daily average of 6.75bn.