By STEVE ROTHWELL
NEW YORK (AP) â¿¿ Stocks slumped on Wall Street Thursday, and the rally which has pushed indexes close to record levels stalled.
The Dow Jones industrial average fell 42 points to 13,944, after sliding as much as 134 points earlier. The index has edged lower this week, after logging its best January in almost two decades.
The Standard and Poor's 500 fell three points to 1,509 and the Nasdaq composite dropped three points to 3,165."We had such a big January, some type of weakness, or consolidation, make sense here to us," said Ryan Detrick of Schaeffer's Investment Research in Cincinnati. The S&P 500 has lost an average of 0.58 percent in February over the last 20 years, making it the weakest month for stocks, according to research by Schaeffer's. Stocks fell as weaker earnings and worries about Europe overshadowed healthier signs for the U.S. economy. Fewer Americans sought unemployment benefits last week, a sign that layoffs are easing. Applications for unemployment benefits fell 5,000 to 366,000. But the stock price of News Corp. fell 66 cents, or 2.3 percent, to $27.52 after the media conglomerate cut its forecast for annual earnings. Weakness at several businesses, including its Fox broadcast network, should offset a gain in earnings in the most recent quarter. Investors also worried about comments from European Central Bank president Mario Draghi. He pledged to keep a close eye on the rising euro, fearing that the currency's rally in recent month could hurt exports and further harm the region's fragile economy. "You could have very weak growth in Europe for the next five or ten years," said Michael Sheldon, chief strategist at RDM Financial Group. "There's a lot of austerity going through the European markets, so it's going to be a long time before they re-establish themselves."