Stocks Grind Lower Throughout Afternoon, Erasing Early Gains

4:09 PM, Apr 19, 2012 -- Stocks ended lower today as lackluster economic news and ongoing concerns over European debt problems more than overwhelmed stronger-than-expected bank earnings this morning. Most industry sectors in the S&P 500 were lower, with the steepest declines for industrial and consumer discretionary stocks. F

Financial shares turned south this afternoon after the Federal Reserve said Wall Street banks will have two years to separate proprietary trading from the rest of their operations.

Banks will have the "full two-year period" provided by the Dodd-Frank financial overhaul law to "fully conform" their activities and investments, according to the Federal Reserve and four other U.S. agencies in a joint statement issued today. The Fed has the authority to extend the period of compliance beyond July 21, 2014, the regulators said.

Earlier, Citigroup analysts helped push stocks lower when they said its likely Moody's Investors Service will soon place France's Aaa rating on review for possible downgrade, turning back positive moods after a successful Spanish debt auction today. International Monetary Fund Managing Director Christine Lagarde also today said she expects more contributions after landing pledges of about US$320 billion in her campaign for bigger reserves to combat threats to global growth, according to a Bloomberg report.

In economic news, an index of leading economic indicators rose 0.3% during March, topping forecasts and marking the sixth month in a row the Conference Board gauge has climbed. Expectations were for a 0.2% increase.

But the number of Americans filing for unemployment benefits was higher than expected with 386,000 claims filed last week. Experts in a Dow Jones Newswires poll had forecast 375,000 claims. The Labor Department also revised last week's number higher.

Also weighing on stocks today was a survey of manufacturers in the mid-Atlantic region saying business conditions declined more than expected. The Federal Reserve Bank of Philadelphia said its factory index fell to 8.5 in April from a 12.5 reading in March. Economists anticipated a reading of 10.7. Sales of previously owned homes also fell for the second-straight month, missing expectations, with existing-home sales dropping 2.6% during March from the prior month.

In company news, Human Genome Sciences (HGSI) shares nearly doubled in price today to $14.28 each after turning down an unsolicited offer from GlaxoSmithKline (GSK) to be acquired for $13.00 a share in cash. HGSI's board rejected the bid, saying it didn't reflect the company's full value. The biotech company is working to develop Benlysta, a prospective treatment for systemic lupus erythematosus, along a possible treat inhaled anthrax.

Bank of America (BAC) this morning reported Q1 net income of $0.03 per share, which includes certain accounting charges. Profit per share, excluding one-time items, was $0.31, far higher than the $0.12 the Street was looking for. Revenue was $22.5 billion, a decline from $27.1 billion in last year's quarter but in line with estimates.

The Travelers Companies (TRV) reported Q1 EPS of $2.02, far higher than the $1.52 analysts were looking for. Revenue for the quarter climbed 1.1% from the previous year to $6.39 billion. The Street was looking for revenue of $5.71 billion.

Also, Morgan Stanley (MS) reported Q1 net revenues of $8.9 billion compared with $7.8 billion a year ago and net income of $0.71 per share, up from $0.59 a year ago. The analyst consensus was for a profit of $0.44 per share on revenue of $7.31 billion, according to Thomson Reuters.

Commodities were mixed, with crude oil for May delivery settling down 40 cents to $102.27 a barrel. June gold rose $1.60 to finish at $1641.60 an ounce while May silver rose $0.27 to finish at $31.76. May copper was unchanged at $3.63. May natural gas finished down 4.5 cents to $1.90 per 1 million British thermal units.

June gold is up $4.30 to $1,643.90 an ounce while May silver is up 31.3 cetns to $31.77 an ounce. May copper is up nearly 1 penny to $3.6230 a pound. May natural gas is down 4 cents to $1.9110 per 1 million British thermal units.

Here's where the markets stand at end-of-day:

Dow Jones Industrial Average down 68.65 (-0.53%) to 12,964.10

S&P 500 down 8.22 (-0.59%) to 1,376.92

NASDAQ Composite down 23.89 (-0.79%) to 3,007.56

GLOBAL SENTIMENT

Hang Seng Index up 1.03%.

China Shanghai Composite Index down 0.09%.

FTSE 100 down 0.01%.

UPSIDE MOVERS

(+) MLNX, Reports Q1 EPS of $0.51 vs. $0.24 a year ago.

(+) SYNT, Blows past expectations with $0.98 Q1 EPS

DOWNSIDE MOVERS

(-) HUSA, Company confirms SEC investigation

(-) GNTX, EPS in-line with expectations, revenues miss.