MARKET SNAPSHOT: U.S. Stocks Drop Sharply; Dow Off 135 Points
By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- Stocks on Wall Street closed sharply lower on the first trading day of 2014 after data pointed to a slowdown in manufacturing expansion in China and the United States.
The Dow Jones Industrial Average (DJI) fell 135.31 points, or 0.8%, to 16,441.35, marking its biggest one-day point loss since Nov. 7.
The S&P 500 (SPX) dropped 16.38 points, or 0.9%, to 1,831.98. Broad-based losses on the S&P 500 were led by the technology and energy sectors.
The technology-heavy Nasdaq Composite (RIXF) dropped 33.52 points, or 0.8%, to 4,143.07.
The main stock indexes fell on the first trading day of the year for the first time since 2008 and analysts said that losses were due to profit-taking after the market's strong rally in 2013. The Dow and S&P 500 both ended 2013 at record highs on Tuesday and U.S. markets were closed on Wednesday for New Year's Day.
Thursday's losses came as data raised some concerns about manufacturing growth. China's official manufacturing purchasing managers index fell in December to 51.0 from 51.4 in the previous month, pointing to the difficulties facing exporters. In the U.S., the Institute for Supply Management reported that its closely followed manufacturing index slipped to 57% in December from 57.3% the month before. The level indicates a slower but still-healthy pace of expansion.
Upbeat data on jobless claims did little to cheer investors. Initial weekly claims for unemployment benefits fell by 2,000 to 339,000 last week, the Labor Department reported.
"Today's jobless claims and manufacturing data were positive and showed continued momentum in the economy," said Quincy Krosby, market strategist at Prudential Financial.
"The ISM headline number was not spectacular, but if you look at the details, new orders were sharply up. The improving economy is also reflected in 10-year Treasury yields, which are marching higher. All this bodes well for stocks, so we see today's pullback as profit-taking and consolidation."
Yields on the 10-year Treasury note (10_YEAR) traded near 3%.
"Retails investors, who are usually the 'morning' traders, are readjusting their portfolios after great returns," Krosby said.
* Stocks move on analysts ratings: Apple Inc. shares dropped 1.4% after Wells Fargo downgraded the iPhone maker to market perform from outperform. Losses in Apple shares dragged the technology sector as well as the Nasdaq Composite down.
* Shares in Bank of America rose 3.4% after analysts at Citigroup Inc. upgraded the stock to buy from neutral.
* Sprint Corp. shares fell 3.3% after Cowen & Co. downgraded the firm to market perform from outperform. However, analyst Colby Synesael raised the price target to $8.25 from $7.50. "We still believe Sprint is a 'concept stock' and that valuation is more subjective, but using our assumptions it is fairly valued," Synesael wrote.
* Urban Outfitters Inc. climbed 1.8% after Jefferies analysts upgraded the stock to buy, citing it as a top pick for 2014, according to the Analyst Ratings Network.
* Twitter Inc. shares rose 6.1% after a volatile December. The stock surged over the month, despite a tumble in some of the final days.
* BlackBerry Ltd shares rose 2.8% after the company announced it is ending Alicia Keys' contract as a creative director.
* The comment: Nouriel Roubini -- a.k.a. 'Dr. Doom' -- is getting optimistic. The respected New York University economist has been pivoting toward a more optimistic outlook over the past few months. Now, his latest 2014 outlook definitely bolsters his nascent bullish credentials.
More must-reads from MarketWatch:
What the big money is betting on in 2014
These U.S. stock fund types can fit your 2014 checklist
Apple slips, Urban Outfitters up on analyst call
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- Stocks on Wall Street closed sharply lower on the first trading day of 2014 after data pointed to a slowdown in manufacturing expansion in China and the United States.
The Dow Jones Industrial Average (DJI) fell 135.31 points, or 0.8%, to 16,441.35, marking its biggest one-day point loss since Nov. 7.
The S&P 500 (SPX) dropped 16.38 points, or 0.9%, to 1,831.98. Broad-based losses on the S&P 500 were led by the technology and energy sectors.
The technology-heavy Nasdaq Composite (RIXF) dropped 33.52 points, or 0.8%, to 4,143.07.
The main stock indexes fell on the first trading day of the year for the first time since 2008 and analysts said that losses were due to profit-taking after the market's strong rally in 2013. The Dow and S&P 500 both ended 2013 at record highs on Tuesday and U.S. markets were closed on Wednesday for New Year's Day.
Thursday's losses came as data raised some concerns about manufacturing growth. China's official manufacturing purchasing managers index fell in December to 51.0 from 51.4 in the previous month, pointing to the difficulties facing exporters. In the U.S., the Institute for Supply Management reported that its closely followed manufacturing index slipped to 57% in December from 57.3% the month before. The level indicates a slower but still-healthy pace of expansion.
Upbeat data on jobless claims did little to cheer investors. Initial weekly claims for unemployment benefits fell by 2,000 to 339,000 last week, the Labor Department reported.
"Today's jobless claims and manufacturing data were positive and showed continued momentum in the economy," said Quincy Krosby, market strategist at Prudential Financial.
"The ISM headline number was not spectacular, but if you look at the details, new orders were sharply up. The improving economy is also reflected in 10-year Treasury yields, which are marching higher. All this bodes well for stocks, so we see today's pullback as profit-taking and consolidation."
Yields on the 10-year Treasury note (10_YEAR) traded near 3%.
"Retails investors, who are usually the 'morning' traders, are readjusting their portfolios after great returns," Krosby said.
* Stocks move on analysts ratings: Apple Inc. shares dropped 1.4% after Wells Fargo downgraded the iPhone maker to market perform from outperform. Losses in Apple shares dragged the technology sector as well as the Nasdaq Composite down.
* Shares in Bank of America rose 3.4% after analysts at Citigroup Inc. upgraded the stock to buy from neutral.
* Sprint Corp. shares fell 3.3% after Cowen & Co. downgraded the firm to market perform from outperform. However, analyst Colby Synesael raised the price target to $8.25 from $7.50. "We still believe Sprint is a 'concept stock' and that valuation is more subjective, but using our assumptions it is fairly valued," Synesael wrote.
* Urban Outfitters Inc. climbed 1.8% after Jefferies analysts upgraded the stock to buy, citing it as a top pick for 2014, according to the Analyst Ratings Network.
* Twitter Inc. shares rose 6.1% after a volatile December. The stock surged over the month, despite a tumble in some of the final days.
* BlackBerry Ltd shares rose 2.8% after the company announced it is ending Alicia Keys' contract as a creative director.
* The comment: Nouriel Roubini -- a.k.a. 'Dr. Doom' -- is getting optimistic. The respected New York University economist has been pivoting toward a more optimistic outlook over the past few months. Now, his latest 2014 outlook definitely bolsters his nascent bullish credentials.
More must-reads from MarketWatch:
What the big money is betting on in 2014
These U.S. stock fund types can fit your 2014 checklist
Apple slips, Urban Outfitters up on analyst call
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
