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Overnight Markets: US stocks retreat on tech warnings
Sentiment remained weak after the lack of any monetary easing by the Bank of Japan.
U.S. stocks retreated on Thursday amid more warnings in the technology sector and as concern intensified about a slowdown in the global economic recovery.
The Dow Jones industrial average shed 31 points, or 0.25%, to 12,573 at the close. The Standard & Poor's 500 Index shed seven points, or 0.5%, to 1,335. The Nasdaq Composite Index lost 22 points, or 0.75%, to close at 2,866.
Overall market sentiment remained weak after the lack of any monetary easing by the Bank of Japan on Thursday. Data due out tonight may show China’s economic growth declined below 8% for the first time since 2009, according to the median estimate in a Bloomberg News survey.
The latest economic data from the U.S. showed some promising signs, with initial claims for state unemployment benefits dropping to the lowest in four years. Another report showed that the U.S. June import prices fell 2.7%, the most in more than three years, due to a plunge in the cost of imported oil.
Tech shares suffered the most, with the Indian IT heavyweight Infosys Ltd becoming the latest big tech company to warn of sluggish sales, saying global economic uncertainty was hitting technology spending. U.S.-listed shares of Infosys plunged 11.2%.
Financial stocks dropped as European lenders fell. Bank of America lost 2% and Morgan Stanley retreated 1.9%. JP Morgan Chase slid 1.6%
Supervalu Inc. sank 49% after the third- largest U.S. grocery chain said it will review strategic alternatives for the business and suspended its dividend.
Hotel operator Marriott International Inc reported a higher quarterly profit after Wednesday's close, but lowered its fee revenue forecast due to weakness in some international markets. Its stock slid 6.4%.
On the positive side, Procter & Gamble gained 3.7% supporting the Dow after a source said activist investor William Ackman appears to be building a stake in the consumer products giant. Merck & Co. gained 4.1% after a pivotal trial of the company’s experimental osteoporosis drug odanacatib showed that it reduces the risk of fracture.
Homebuilders also gained, with Lennar Corp. jumping 3.6% and PulteGroup Inc. rising 2.9%.
In Asia, equities gained on Friday on speculation policy makers will take further measures to support growth after China reported the slowest expansion in three years, South Korea lowered its outlook and Singapore said its economy contracted.
The MSCI Asia Pacific Index rose 0.5% to 115 as of 1:04 p.m. in Tokyo. China’s Shanghai Composite Index swung between gains and losses and Hong Kong’s Hang Seng Index advanced 0.5%. Singapore’s Straits Times Index increased 0.3% even as a report showed the city state’s economy contracted last quarter. Japan’s Nikkei 225 Stock Average advanced 0.3%, while Australia’s S&P/ASX 200 Index increased 0.6%. South Korea’s Kospi Index rose 1%.
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by Gavin Lumsden on Apr 16, 2014 at 15:17