US stocks drop sharply in morning following European slump
By BERNARD CONDON (AP)
NEW YORK (AP) — U.S. stocks are falling broadly in early trading on Friday following steep declines in Europe and some disappointing results from big U.S. companies. All 10 industry groups of the Standard and Poor's 500 are down, led by the consumer discretionary companies.
KEEPING SCORE: The Dow Jones industrial average fell 273 points, or 1.5 percent, to 17,831 as of 11:24 a.m. Eastern time. The Standard & Poor's 500 index lost 25 points, or 1.2 percent, to 2,080. The Nasdaq composite fell 77 points, or 1.5 percent, to 4,931.
CHINA SHORTS: After markets closed in Asia, Chinese financial regulators issued more warnings about that country's soaring stock market. Regulators said they will tighten rules on margin lending and make it easier for investors to bet against the market there, The Wall Street Journal reported. Shanghai's stock market has surged 33 percent so far this year and is up 6 percent this week alone.
BLOOMBERG DOWN: Bloomberg LP's trading terminals, which are used by most of the world's biggest financial firms, went down for two and a half hours on Friday due to apparent technical problems, prompting the British government to postpone a planned 3 billion-pound ($4.4 billion) debt issue.
GREEK WORRY: Another thing worrying investors is Greece's shaky finances. Greece and its creditors are still struggling to find a deal that can keep the country from defaulting on its debt. The argument is over what reforms Greece should make in return for loans. Many think Greece will struggle to make payments to the International Monetary Fund due next month if it fails to reach a deal.
The concerns have caused investors to demand higher rates for loaning money to Greece's government. The yield on the country's benchmark 10-year bond jumped to 12.71 percent Friday. That rate has more than doubled from 5.51 percent in September.
AMEX TROUBLE: American Express fell $3.88, or 4.8 percent, to $77.02 after its financial results took a blow from the recent sharp appreciation of the U.S. dollar. Amex's revenue fell even as its profits increased 6 percent. The stronger dollar made the company's overseas earnings worth less after being converted back into U.S. currency.
CHIP DIP: Advanced Micro Devices plunged nearly 14 percent after reporting a larger loss than investors had expected. After the market close on Thursday, the chipmakers said that losses, adjusted for restructuring costs and stock option expense, came to 9 cents per share versus an expected loss of 6 cents per share. The stock fell 42 cents to $2.46.
FUN AND GAMES: Mattel's stock jumped 96 cents, or nearly 4 percent, to $26.23. After the market closed Thursday, the toymaker reported a smaller quarterly loss than analysts had expected. Mattel's revenue also trumped estimates, helped by strong sales of Hot Wheels.
EUROPE SLUMPS: Germany's DAX slumped 2.5 percent. France's CAC 40 shed 1.5 percent and Britain's FTSE 100 fell 1 percent. Investors piled into German government debt, which is perceived as being among the safest investments denominated in euros. The yield on the 10-year German government bond fell to 0.08 percent from 0.09 percent. Yields fall when bond prices rise.
ASIA'S DAY: The Shanghai Composite index rose 2.2 percent after data showed that China's economy grew at the slowest pace since 2009 during the first quarter. The data stoked expectations that the country would introduce further stimulus measures to achieve its annual growth target.
South Korea's Kospi rose 0.2 percent. Hong Kong's Hang Seng shed 0.3 percent. Japan's Nikkei 225 fell 1.2 percent, while Australia's S&P ASX 200 was down 1.2 percent.
ENERGY: U.S. benchmark crude oil slipped 59 cents to $56.12 per barrel in New York. The contract rose 32 cents to settle at $56.71 on Thursday, its highest price this year.
CURRENCIES, BONDS: The dollar rose to 119.08 yen from 118.98 yen while the euro was little changed at $1.0772. Bond prices fell after the U.S. government reported a slight increase in inflation last month. The yield on the 10-year Treasury note rose to 1.90 percent.