NEW YORK (TheStreet) -- Stocks fell for the fifth straight trading session Thursday, pulled lower by continued eurozone debt contagion worries and a disappointing read on manufacturing activity in the Philadelphia region.
The Dow Jones Industrial Average fell 156 points, or 1.2% to close at 12,442. The blue-chip index has now lost ground in five straight sessions, and 11 of the past 12 trading days.
Worries about the future of the euro continued to dominate the markets, as Fitch Ratings downgraded Greece's credit rating by a notch on "heightened risk" that it will exit the euro zone.Meanwhile, Spain's borrowing costs were on the rise again and Moody's (MCO) delivered an expected downgrade of multiple Spanish banks late in the day, adding to the anxiety. The 10-year Treasury note rallied 18/32, with yields falling to 1.706%, the lowest level since September. Breadth within the Dow was negative with 24 of the index's 30 components in decline. The biggest percentage losers in the index were Caterpillar (CAT), JPMorgan Chase (JPM),Home Depot (HD) , American Express (AXP) and Boeing (BA). Wal-Mart (WMT) though popped more than 4% after the world's largest retailer reported Thursday first-quarter earnings of $3.74 billion, or $1.09 a share, up from year-earlier earnings of $3.39 billion, or 97 cents a share. Analysts, on average, were looking for a profit of $1.04 a share in the April-ended period on sales of $110.54 billion. Wal-Mart sees second-quarter earnings of between $1.13 and $1.18 a share; analysts are expecting $1.16 a share. Other Dow components on the rise included Verizon Communications (VZ),AT&T (T), Alcoa (AA) and Chevron (CVX). Hewlett-Packard (HPQ)ticked higher following a report that the company is planning to cut 8% of its workforce, roughly 25,000 jobs, according to Bloomberg. In the broader market, number of losers outpaced winners by 6-to-1 on the New York Stock Exchange and nearly 5-to-1 on the Nasdaq. From a sector standpoint, capital goods and transportation stocks were under the most pressure, followed by technology, consumer non-cyclicals and financials. In domestic news Thursday, the Philadelphia Federal Reserve said that its general economic index fell to minus 5.8 in May from 8.5 in April. This was a big miss as economists surveyed by Thomson Reuters had expected the index to rise to 10. The Conference Board's report of leading economic indicators for April was also a disappointment. The report showed a decline of 0.1% in April after a gain of 0.3% in March. Economists had forecasts a rise of 0.2% for last month. The Conference Board attributed the drop to rising jobless claims and falling housing prices. "Leading economic indicators came out weaker than expected, as did the [Philadelphia] Fed reading that went negative," said Sam Stovall, chief equity strategist, S&P Capital IQ. "I think people are worried that, 'gee, it's not just a European and possibly an Asian situation,' but surprise, surprise the U.S. is not decoupling from the rest of the world -- that we might have our economic problems as well." Also on Thursday, the Labor Department reported that initial jobless claims were unchanged at a seasonally adjusted 370,000 in the week ended May 12 from an upwardly revised figure of 370,000 the prior week. Economists surveyed by Thomson Reuters had forecast a fall in claims to 365,000 last week from 367,000 the week before. London's FTSE settled down 1.1% and the DAX in Germany fell 1%. "Chances are this market decline will be contained to a pullback - the average pullback is 7%, which is a decline to 1,320 on the S&P ... but widen that band and you could go down to 1,278 and still be within that 10% decline," said Stovall. In the eurozone, Spain saw borrowing costs rise amid fears about the health of its economy, though its latest debt auction went relatively smoothly with the country raising €2.5 billion ($3.2 billion).
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