US STOCKS-Wall St tumbles on euro zone, economy fears

By Edward Krudy

NEW YORK, Feb 4 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) sank on Thursday as
escalating fears of sovereign debt problems in Europe led
investors to dump riskier assets.

Mining and materials companies’ shares took a pounding.
Worries over the debt struggles of euro-zone countries Greece,
Portugal and Spain fueled a flight from stocks to the
safe-haven dollar, which hurt commodity prices denominated in
the greenback. Barrick Gold (ABX.N: ) fell 5.5 percent to $33.93
and U.S. Steel (X.N: ) lost 5.1 percent to $44.44. For details
see [ID:nEUROPEAND]

“There is significant global concern because of the tidal
wave of money shipped around the world,” said Fred Dickson,
chief market strategist of D.A. Davidson & Co in Lake Oswego,
Oregon.

Investors are focusing on government debt in Spain and
Portugal, the latest euro-zone countries to rattle markets
after Greece.

(To see a graphic showing the rising cost of insuring these
nations’ debt, click on http://link.reuters.com/kyd77h)

Economic data also weighed on investors. Weekly initial
claims for state unemployment benefits rose unexpectedly,
pointing to stubborn weakness in the U.S. labor market.
[ID:nN04233513]

The specter of rising unemployment before Friday’s nonfarm
payrolls report overshadowed better-than-expected factory
orders as investors piled into safer assets. U.S. Treasury debt
prices rallied.

The Dow Jones industrial average (.DJI: ) dropped 207.00
points, or 2.02 percent, to 10,063.55. The Standard & Poor’s
500 Index (.SPX: ) fell 25.71 points, or 2.34 percent, to
1,071.57. The Nasdaq Composite Index (.IXIC: ) lost 51.33 points,
or 2.34 percent, to 2,139.58.

Corporate earnings were mixed. Cisco Systems Inc (CSCO.O: )
shares rose 0.6 percent to $23.20 after the company reported
higher-than-expected revenue growth late on Wednesday as more
customers resumed upgrading their networks to handle increasing
wireless and Internet traffic. [ID:nN0395898]

In other results after Wednesday’s closing bell, silicon
maker MEMC Electronic Materials Inc (WFR.N: ) posted a quarterly
loss on lower sales. But the company said pricing pressures
have moderated and product volume continued to increase. Its
stock fell 11.9 percent to $12.01.

Weighing on the financial sector, MasterCard Inc (MA.N: )
tumbled 9.8 percent to $223.43 after it posted quarterly
earnings that fell short of Wall Street’s estimates. That
contrasted with stronger-than-expected earnings from Visa Inc
(V.N: ) late Wednesday. Visa’s shares rose 0.8 percent to $84.22.
[ID:nN03182930] and [ID:nN03155595]

An S&P index of financial stocks (.GSPF: ) fell 3 percent.

Many U.S. retailers reported January sales that beat Wall
Street’s estimates. Department store operator Macy’s Inc’s
(M.N: ) and teen retailer American Eagle Outfitters Inc (AEO.N: )
raised earnings forecasts. [ID:nN04173396]

Macy’s rose 2 percent to $16.56, while America Eagle fell
2.3 percent to $16.06. But Target Corp (TGT.N: ), the No. 2 U.S.
discount retailer, posted disappointing sales and said it was
prepared for a challenging environment in 2010. Its shares slid
3.4 percent to $48.87. An S&P retail index (.RLX: ) dropped 1.8
percent.

Stock Analysis

(Reporting by Edward Krudy; Editing by Jan Paschal)
([email protected]; Tel: +1 646-223-6314;
Reuters Messaging: [email protected]@reuters.net;
Twitter: @EDkrudy_Reuters)

US STOCKS-Wall St tumbles on euro zone, economy fears