Fears about the financial reform regulation and dour outlook from retailers sent stocks into a tailspin Thursday. With unemployment still at a record high and consumer spending still wishy-washy, retailer’s weak forecasts were reflective of concerns that still weigh on the economy. A couple of tepid economic reports added to the bearish sentiments.
After a brief stay in the green, the Dow Jones industrial average plunged 146 points, or 1.4%, to close at 10,152.80. Twenty-eight of the thirty DJIA components closed the day in the red. The broader S&P 500 index dropped 18 points, or 1.7%, and the Nasdaq Composite index shed 37 points or 1.7%. The CBOE Vix, considered to be the market’s fear gauge, shot up 10.5% to 29.74. On the New York Stock Exchange, declining shares beat those that advanced in price by a three-to-one margin on volume of 1.26 billion shares.
Consumer discretionary, material and financial stocks were the leading laggards. Shares in Nike (NYSE:NKE) fell 4% after the company said a stronger dollar and higher costs would eat into its earnings. Bed Bath & Beyond (NASDAQ:BBBY) dropped 5.6% after the company announced a second-quarter outlook that was below Street estimates. Even as the retailers forecast disappointed investors, earnings misses from the likes of Best Buy (NYSE:BBY), Walgreens (NYSE:WAG), and ConAgra (NYSE:CAG) had them questioning the pace of the economic recovery.
Shares in Dell (NASDAQ:DELL) dropped 6.4% after the company’s fiscal year outlook disappointed the Street. Apple (NASDAQ:AAPL) shares fell 0.8% even as the newest version of its iPhone hit the stores. Some customers reportedly complained about such technical matters as left-handed reception problems.
Concerns about the proposed Wall Street reform weighed on stocks from the sector. Bank of America Corp. (NYSE:BAC) dropped 2.7% and JPMorgan Chase & Co. (NYSE:JPM) fell 2.2%.
Greece, at the center of Europe’s debt quagmire, once again was in news for the wrong reason. The cost of protecting against a default in its debt, as priced by credit-default swaps, jumped to a record high yesterday.
Meanwhile, some reports said General Motors is planning to file for a public offering of its common stock. The reports said the offering could raise up to $20 billion in one of the largest offerings ever in the history of the IPO market.
Crude prices added 16 cents to settle at $76.51 a barrel on the New York Mercantile Exchange.
