Stocks Skid for Fourth Straight Day

NEW YORK ( TheStreet) -- U.S. stocks slid Thursday for a fourth straight session after European Central Bank President Mario Draghi said little about helping struggling nations a day after the Federal Reserve failed to deliver support to the U.S. economy.

A surprising decline in U.S. factory orders also put a damper on sentiment.

The Dow Jones Industrial Average dropped 92 points, or 0.7%, to 12,879.

Breadth was extremely negative on the Dow, with only Wal-Mart ( WMT), Caterpillar ( CAT) and McDonald's ( MCD) trading higher. The biggest percentage laggards were Chevron ( CVX), United Technologies ( UTX), 3m ( MMM), Coca-Cola ( KO) and IBM ( IBM).

The S&P 500 slumped 10 points, or 0.7%, to 1,365, and the Nasdaq fell 10 points, or 0.4%, to 2,910.

The major averages were on pace for their biggest weekly drop in nine weeks.

All sectors in the broad market declined. The weakest among them were energy, utilities, conglomerates and financials.

Losers were outpacing winners on the New York Stock Exchange 2 to 1 and the Nasdaq by a ratio of about 1.4 to 1.

The ECB's Draghi said at a press conference Thursday after a central bank meeting that policymakers may work with governments to buy bonds to ease the continent's debt crisis. Germany, the region's biggest and strongest economy, isn't entirely convinced about the bailout.

Draghi said he will design appropriate modalities for policy measures over the next couple of weeks and that concerns of market participants about seniority will be addressed.

"These remain promises," said Dan Greenhaus, chief global strategist at BTIG. "Investors are tired of promises. They want action."

"Once again, we have no commitment to action from the ECB, and no execution of promises previously made," said Carl Weinberg, chief economist at High Frequency Economics. "Nothing seems set to happen now ... Traders and investors who expected immediate action are, and should be, disappointed."

Weinberg noted that Draghi's statement about being "really surprised at the amount of attention my remarks last week received in the press," translates to, "I cannot deliver the promises I implied in my London speech last week ... you must have misunderstood me."

The euro eased after the ECB announcement, while Spanish and Italian 10-year yields rose.

The FTSE in London settled 0.9% lower and the DAX in Germany closed down by 2.2%.

The Labor Department said before the markets opened Thursday that initial jobless claims for the week ended July 28 increased by 8,000 to 365,000 from the previous week's upwardly revised figure of 357,000. The four-week moving average was 365,500, a decrease of 2,750 from the previous week's revised average of 368,250. Economists, on average, expected initial jobless claims of 370,000.

Continuing claims for the week ended July 21 fell by 19,000 to 3.272 million.

Before the jobless claims report, executive outplacement services provider Challenger Gray & Christmas said planned layoffs in the U.S. fell for the second straight month in July, as employers announced job cuts totaling 36,855, down 2% from 37,551 in June.

Meanwhile, the Commerce Department reported that factory orders fell 0.5% in June after increasing by a downwardly revised 0.5% in May. Economists predicted June orders would increase by 0.5%.

September crude oil futures fell 85 cents to settle at $88.91 a barrel. December gold futures fell by $16.60 at $1,590.70 an ounce.

The benchmark 10-year Treasury was rising 14/32, diluting the yield to 1.482%. The greenback was gaining 0.43%, according to the dollar index.

In corporate news, General Motors ( GM) shares fell 2.6% after the automaker posted profit of 90 cents a share, which topped the Wall Street target of 75 cents, though its net income took a hit from losses in Europe.

Abercrombie & Fitch ( ANF) shares plunged 14.6% after the apparel retailer slashed its second-quarter outlook amid tepid demand for its higher end items.

Shares of Gap ( GPS) popped by 12.8% after the clothing retailer announced Thursday that July same-store sales increased by a better-than-expected 10% and that it expects a year-over-year rise in second-quarter earnings.

First Solar ( FSLR) shares surged 21.2% after the solar panel company exceeded second-quarter estimates and hiked its full-year revenue outlook the previous day.

Bristol-Myers Squibb ( BMY) suspended a mid-stage study of its experimental hepatitis C drug BMS-094 due to a serious safety issue said to heart failure, according to ISI Group analyst Mark Schoenebaum.

BMS-094 was the sole reason behind Bristol-Myers' $2.5 billion acquisition of Inhibitex last January.

Shares tumbled 8.6%.

American International Group ( AIG) is looking to buy back a large amount of its shares from the government in a push that could make the U.S. a minority shareholder by the fall and allow the insurer to fully repay its bailout sooner than expected, the Journal reported, citing people familiar with the company's thinking.

Shares rose 0.84% in after hours after the company reported second-quarter operatings earnings per share of $1.06, which beat 60 cents consensus of analysts polled by Bloomberg.

The source of Wednesday's trading problem in about 150 stocks was traced to Knight Capital Group ( KCG), which said its market-making unit had suffered a software glitch that was interfering with its system's interaction with the New York Stock Exchange.

Knight Capital said in a press statement released Thursday that it has traded out of its entire erroneous trade position, which has resulted in a realized pretax loss of about $440 million.

Shares collapsed 63% on Thursday and were dipping another 19% after-hours.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

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