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After housing data, Dow drops most in 2 months

After housing data, Dow drops most in 2 months

U.S. stocks tumbled the most in two months after energy and pharmaceutical companies reported quarterly results that disappointed investors and existing home sales dropped more than forecast.
Occidental Petroleum Corp., the fourth-largest U.S. oil company, led a decline in fuel producers after fourth-quarter profit dropped 19 percent, while a loss at Bristol-Myers Squibb Co. sent shares of drugmakers to their biggest decline this year.
The reports reinforced concern that energy companies, whose shares have led the four-year bull market, will slow the pace of profit increases in 2007. Exxon Mobil Corp. pulled the Standard & Poor's 500 Index from a six-year high and the Dow Jones Industrial Average from a record as oil prices tumbled.
"We're not going to get the same kind of earnings growth that we got in the third quarter," said Benjamin Pace, who helps oversee US$17 billion as chief investment officer at Deutsche Bank Private Wealth Management in New York. Analysts estimate profit at S&P 500 companies rose 9 percent in the fourth quarter after jumping 23 percent in the previous period.
The S&P 500 slipped 16.23, or 1.1 percent, to 1423.90. The Dow average dropped 119.21, or 0.9 percent, to 12,502.56. For both, it was the steepest retreat since November 27. The Nasdaq Composite Index fell 32.04, or 1.3 percent, to 2434.24.
Stocks extended their losses after yields on U.S. Treasuries rose to the highest since August. Meanwhile, the U.S. dollar advanced against the euro and gold slid from a five-month high.
Thursday's decline trimmed the S&P 500's gain this year to 0.4 percent.
A measure of energy companies, the worst performers in 2007 among 10 industry groups, dropped 2 percent.
Stocks opened lower on signs that the housing slump has yet to end. Sales of previously owned homes fell in December to an annual rate of 6.22 million from 6.27 million the previous month, the National Association of Realtors said. Sales for all of 2006 fell 8.4 percent from the previous year, the biggest drop in 24 years.


Updated : 2021-04-21 19:08 GMT+08:00