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U.S. stocks lower on FOMC bullish let down; Dow slips 0.25%

Stock MarketsJul 12, 2012 04:47PM ET
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This article has already been saved in your Saved Items - U.S. stocks closed down Thursday, although off the lows, as disappointing U.S. employment data fueled fresh concerns over the strength of the domestic economic recovery, while the Federal Reserve dampened expectations for further stimulus measures in the near future.

At the close of U.S. trade, the Dow Jones Industrial Average dropped 0.25%, the S&P 500 index slipped 0.50% while the Nasdaq Composite index gave back 0.75%.

Official data Indicated that the number of people who filed for unemployment assistance in the U.S. last week fell significantly more-than-expected, matching the lowest level in four years.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 7 fell to a seasonally adjusted 350,000, compared to expectations for a decline to 372,000.

The data came after the Fed said in the minutes of its June policy meeting that the U.S. economy would have to worsen further before the central bank implements additional easing measures.

Market sentiment also remained under pressure after the European Central Bank’s monthly bulletin reiterated that downside risks have materialized and that growth in the region will remain weak.

Financial stocks were broadly lower, as U.S. lenders tracked their European counterparts. Bank of America saw shares tumble 1.57% and Citigroup dropped 1.16%, while JP Morgan and Goldman Sachs declined 1.01% and 0.80% respectively.

Energy stocks also contributed to losses, as oil prices tumbled over 1%. Exxon Mobil dropped 0.53% and EOG Resources plunged 2.41%.  

Earlier in the day, Centrica, which owns British Gas, said it agreed to buy two New York-based power providers from a U.S. subsidiary of Iberdrola for USD110.2 million in cash to strengthen its position and increase its customer base in the U.S. Northeast.  

Elsewhere in corporate news, U.S. insurer Cigna retreated 1.02% after saying it agreed to buy a 51% stake in Finansbank's wholly owned insurance unit Finans Emeklilik for USD104 million.

In the tech sector, Apple shares dropped 0.45%, amid reports sellers of the company’s next-generation iPhone on China's largest e-commerce platform, Taobao, were accepting pre-orders of the device, which hasn’t been released yet. 

On the upside, pharmaceutical giant Merck & Co. surged 4.34% after announcing that the trial of an advanced clinical study of an osteoporosis treatment met primary efficacy goals, leading the study’s data-monitoring committee to recommend ending the trial earlier than scheduled.

 At the close of  European  trade, the EURO STOXX 50 dropped 0.81%, France’s CAC 40 declined 0.70%, while Germany’s DAX 30 retreated 0.53%.

In other news Thursday, official data showed that U.S. import prices fell significantly more-than-expected in June, dropping by 2.7% in June, compared to expectations for a 1.7% decline.

On Friday, investors are anticipating the Michigan sentiment numbers and the core PPI from the U.S..

U.S. stocks lower on FOMC bullish let down; Dow slips 0.25%

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