Market Commentary and Intraday News
US stocks fall as European gloom returns
240 days ago
By DANIEL WAGNER
AP Business Writer
A reminder of Europe's crippled economy tugged U.S. stocks broadly lower Monday.
An index of business confidence in Germany, the biggest economy in Europe, fell for a fifth straight month. Many economists had expected it to at least remain flat. Some economists think Germany is headed for a recession.
The Dow Jones industrial average was down 33 points to 13,546 in the first half-hour of trading. The Standard & Poor's 500 index declined four to 1,456. The Nasdaq composite index dropped 20 to 3,160.
Utility and telecommunications stocks rose the most, while technology stocks, weighed down by a drop in Apple, fared the worst.
The threat of the years-old European debt crisis has seemed less immediate in recent weeks. Traders have been cheered central banks' new measures aimed at boosting the global economy.
As in the U.S., the concern in Germany is that an economy on the rebound will be weighed down by the rest of the European countries, half of which are already in recession.
Germany's economy grew 0.3 percent in the second quarter from the previous quarter, but a number of economists now believe the country will fall into a recession in the second half of the year.
In the U.S., traders will be looking for more good news from the housing market, which appears to be bouncing back after being a stuck in a rut for years. The latest data on new and pending home sales is released later in the week.
Lennar on Monday became the latest builder to post surprisingly strong earnings. A rise in orders and the number of homes delivered, adding to a big tax benefit, had the Miami homebuilder quadrupling profits. KB Home on Friday did almost as well, and housing shares jumped on optimistic comments from its CEO, Stuart Miller.
Lennar fell 75 cents to $36.76. KB Home fell 57 cents to $14.69.
Apple fell after sales of the new iPhone 5 missed analysts' targets. The company sold 5 million units in three days. Its stock fell $9.43, or 1.4 percent, to $690.67.
UnitedHealth Group was flat on its first day in the Dow, which shuffled its lineup of stocks to reflect health care's growing importance in the economy. UnitedHealth, the nation's largest health insurer, replaces Kraft Foods in the Dow.
The price of oil fell below $92 a barrel, dragged down by concerns about weakening global growth and demand for crude. Benchmark crude was down $1.28 at $91.61 in electronic trading on the New York Mercantile Exchange.
Stronger demand for safe investments pushed the yield on the 10-year Treasury note down to 1.72 percent from 1.75 percent late Friday.
Daniel Wagner can be reached at http://www.twitter.com/wagnerreports . http://www.twitter.com/wagnerreports
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