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Overnight Markets: US stocks down as small caps slide again

by Himanshu Singh on May 16, 2014 at 04:14

Overnight Markets: US stocks down as small caps slide again

Wall Street declined on Thursday, with the Dow Jones and the S&P 500 registering their worst declines in more than a month, as small-cap shares extended their retreat and Wal-Mart results disappointed.

The Dow Jones industrial average fell 167 points or 1.01%, to end at 16,447. The S&P 500 lost 18 points or 0.94%, to 1,871. Both posted their biggest daily percentage declines in slightly more than a month. The Nasdaq Composite dropped 31 points or 0.76%, to 4,069.

The Russell 2000 index of small-cap stocks lost 0.7%, well off its session low where it hit correction territory, down more than 10% from its early March record close of 1,209.

In the latest economic data, US industrial output fell at its fastest rate in more than one and half years in April, while initial claims for US jobless benefits hit a seven-year low last week.

Wal-Mart Stores Inc (WMT.N) shares lost 2.4%, weighing on both the Dow and the S&P 500. The world's largest retailer forecast second-quarter profit below analysts' estimates. Wal-Mart reported its smallest growth in quarterly sales in nearly five years and a drop in first-quarter profit.

Lincoln National Corp. sank 5.2%, leading insurers lower as 10-year Treasury yields tumbled.

After the bell, shares of J.C. Penney Co Inc (JCP.N) jumped 19% after the US department store chain reported results. Shares of Nordstrom Inc (JWN.N) gained 9%, also after its results.

During the regular session, Cisco Systems Inc (CSCO.O) jumped 6%, a day after the network equipment maker posted a shallower-than-expected drop in quarterly revenue.

General Motors Co. dropped 1.7% after recalling another 2.7 million vehicles. Bristol-Myers Squibb Co. plummeted 6.1% for the biggest decline in the S&P 500.

In Asia, shares declined on Friday in late morning session after a report showed China’s bad loans jumped the most since 2005 and the yen strengthened amid concern about global growth.

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