U.S. Stock Indexes Sink In Midday Trading; Big Banks Fall
NEW YORK (AP) — Disappointing results from Bank of America, Citigroup and other companies led the stock market lower Thursday. Target rose after the retailer announced plans to close down its stores in Canada.
KEEPING SCORE: The Dow Jones industrial average was down 57 points, or 0.3 percent, to 17,369 as of 12 p.m. Eastern time. The Standard & Poor's 500 index fell 10 points, or 0.5 percent, to 2,001. The Nasdaq composite dropped 36 points, or 0.8 percent, to 4,603.
TURBULENT TIMES: Discouraging news on the global economy and falling oil prices have rattled markets over recent weeks. But reports on the U.S. economy remain encouraging. Last week, the government said that the unemployment rate declined to 5.6 percent in December, a six-year low. On Thursday, the New York branch of the Federal Reserve reported manufacturing expanded in the region.
ONE VIEW: "Lately, it has kind of been the economy versus the markets," said Jack Ablin, the chief investment officer at BMO Private Bank. "There's a divergence. The financial markets are worried about the impact of plunging oil prices, at the same time the economic backdrop in the U.S. is improving."
PINCHED PROFITS: Weak revenue from trading and lending helped pull Bank of America's profits down 11 percent in the fourth quarter. The bank's results for both revenue and earnings fell short of Wall Street's estimates. BofA's stock sank 55 cents, or 3 percent, to $15.49.
CITI: Citigroup sank $1.23, or 3 percent, to $47.81 following news that the bank's quarterly profit fell 86 percent. The bank booked big legal and restructuring charges at the end of last year to cover costs tied to a number of investigations. Analysts had expected stronger results.
OVER THERE: In Europe, France's CAC 40 climbed 2.4 percent, while Germany's DAX gained 2.2 percent. Britain's FTSE 100 rose 1.7 percent.
SWISS: The Swiss national bank rocked currency markets on Thursday when it abandoned its efforts to keep the franc artificially low against the euro. The Swiss franc soared in response. Swiss stocks took a pounding on the prospect of Swiss exports becoming more expensive to overseas buyers, and therefore less competitive.
In other trading, the dollar fell to 116.98 yen from 117.49 yen late Wednesday, while the euro fell to $1.1595 from $1.1789.
INDIA: The Reserve Bank of India cut its key interest rate Thursday in a surprise move to revive Asia's third-biggest economy. The decision to lower the rate to 7.75 percent, announced more than two weeks before the central bank's planned monetary policy review on Feb. 3, follows several months of declines in India's stubbornly high inflation rate. The Sensex stock index in Mumbai soared 2.6 percent.
ASIA'S DAY: Japan's Nikkei 225 jumped 1.9 percent. China's Shanghai Composite surged 3.5 percent, and Hong Kong's Hang Seng rose 1 percent.
LATER, EH: Target is closing its stores in Canada, saying it was unable to find a realistic scenario for the division to turn a profit before 2021. It's the first major move by the retailer's new CEO, Brian Cornell. Target's stock rose $1.78, or 2 percent, to $76.12.
FALLING HARD: Radio Shack's stock lost 24 percent following a report in the Wall Street Journal that the struggling electronics retailer could file for bankruptcy protection as early as February. The report said Radio Shack is also talking to a private-equity firm about a sale of its assets. The company's stock fell 11 cents to 30 cents.
BONDS: Prices for government bonds rose, driving the yield on the 10-year Treasury note down to 1.80 percent from 1.86 percent.
– by AP Reporter Matthew Craft