US Stocks Decline As Spanish Recession Dims Sentiment
First Published Monday, 30th April 2012 02:15 pm - © 2012 Dow Jones
-- Stocks lean lower amid Spanish recession worries
-- Europe mostly lower as data shows Spain slipping into recession
-- Regional manufacturing data on deck
By Matt Jarzemsky
Of Dow Jones NEWSWIRES
NEW YORK -(Dow Jones)- The Dow Jones Industrial Average opened lower, putting a seventh-straight monthly gain at risk, as concerns over a recession in Spain outweighed better-than-expected personal income data in the U.S.
The Dow Jones Industrial Average fell 4 points, or less than 0.1%, to 13223 in early morning trade. The Dow rose 24 points, or 0.2%, Friday to stretch its daily winning streak to four sessions.
Standard & Poor's 500-stock index slipped 3 points, or 0.2%, to 1400 and the Nasdaq Composite declined 6 points, or 0.2%, to 3063.
Personal spending slowed in March while income rose more than expected, suggesting consumer buying is providing less of a boost to the economy than it had earlier but could pick up in coming months.
Personal spending rose 0.3%, the Commerce Department said, just shy of the 0.4% increase forecast by economists in a Dow Jones Newswires poll. The prior month's reading was revised up to 0.9%, the biggest gain in over 2Â½ years. Incomes increased 0.4%, more than the 0.2% economists anticipated.
The price index for personal consumption expenditures, excluding volatile food and energy prices, rose 0.2% on a monthly basis in March, in line with economists' expectations.
Manufacturing output in the U.S. Midwest was unchanged last month, with only the machinery sector registering a gain. The Federal Reserve Bank of Chicago said its Midwest Manufacturing Index remained at 92.2, the same as February's upwardly revised reading.
Investors awaited data on manufacturing activity in the Dallas area at 10:30 a.m. EDT.
European markets edged mostly lower, with the Stoxx Europe 600 down 0.2% and in danger of halting a four-session win streak, after data confirmed that Spain slipped back into what is commonly considered a recession. The Spanish economy contracted 0.3% in the first quarter from the fourth quarter, the second straight sequential contraction. A recession is widely defined as two consecutive quarters of negative growth, or contraction.
Asian markets were broadly higher on the back of a strong finish in the U.S. the previous week. Hong Kong's Hang Seng hiked up 1.7% and Australia's ASX 200 tacked on 0.8%. Markets in Japan and Shanghai were closed for holidays.
Crude oil futures shed 0.7% to $104.24 a barrel, while gold futures fell 0.6% to $1,654.70 an ounce. The U.S. dollar rose against the euro but lost ground against the yen.
This week will see 126 S&P 500 companies report, according to Deutsche Bank. Earnings so far have been upbeat. Of the 269 S&P 500 companies that reported through the end of last week, 78% topped consensus Wall Street estimates. That compares with an average of 72% over the previous four quarters.
Shares of Barnes & Noble shot up 84% after the book seller said Microsoft was making a $300 million investment in its Nook digital-book business and college texts unit. Microsoft gained 0.2%.
Scholastic added 3.3% after the company raised its full-year earnings outlook to well above current estimates, citing stronger-than-anticipated sales of "The Hunger Games" trilogy following the release of the movie.
Humana lost 5.7% after the health-care company reported first-quarter earnings that fell short of analyst estimates, and provided a full-year outlook was below current projections.
Anheuser-Busch InBev's U.S.-listed shares fell 1.3% after the Belgium-based beer brewer reported a year-over-year increase in first-quarter earnings revenue that just missed analyst expectations.
Energy Transfer Partners agreed to purchase independent refiner Sunoco in a $5.3 billion deal that would create one of the largest energy partnerships in the U.S. Sunoco shares jumped 20%. Energy Transfer Partners' was up 1.2%.
Gen-Probe, a maker of tests for sexually transmitted diseases, jumped 19% after agreeing to be acquired by health products maker Hologic for about $3.7 billion. Hologic shares fell 7.5%.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; email@example.com