Investing.com - U.S. stocks opened sharply lower on Thursday, as investors remained concerned over the outcome of this week’s European summit amid fears political divisions will prevent the announcement of any new measures to tackle the region’s debt crisis.
During early U.S. trade, the Dow Jones Industrial Average dropped 0.75%, the S&P 500 index declined 0.58%, while the Nasdaq Composite index tumbled 0.93%.
Market sentiment was hit after a German government official indicated that the EU summit would not result in any detailed decisions and warned against high expectations among investors ahead of the conclusion of the summit on Friday.
Adding to the negative tone, Italy saw long term borrowing costs rose to 6.19%, their highest level since December, following an auction of 10-year bonds, while the yield on Spanish 10-year bonds ticked up to 7%, the level that prompted Greece, Ireland and Portugal to seek bailouts.
In the U.S., the Department of Labor said the number of people who filed for unemployment assistance last week fell to a seasonally adjusted 386,000, compared to expectations for a decline to 385,000.
A separate report confirmed that the U.S. economy expanded at an annualized rate of 1.9% during the first quarter, in line with expectations.
Financial stocks were broadly lower, led by JP Morgan, down 3.21%, after the New York Times reported that the lender’s losses from credit derivatives may total as much as USD9 billion, exceeding the firm’s initial estimate.
JP Morgan CEO Jamie Dimon had said on May 10 that the bank lost more than USD2 billion on bets in credit markets taken by its chief investment office in London and that the loss could increase by as much as USD1 billion this quarter.
Shares in Citigroup plunged 2.51% in early trade and Goldman Sachs tumbled 1.72%, while Bank of America saw shares retreat 1.29%.
Elsewhere, shares in Google fell 0.60%, after Wells Fargo resumed its "outperform" rating on the tech giant. The company was also preparing to sell its first tablet from mid-July for USD199, hoping to replicate its smartphone success in a hotly contested market.
Also in the tech sector, Apple shares dropped 0.42%, amid reports that the company’s suppliers in China violated local labor laws when they imposed excessive overtime and skimped on insurance.
The computer technology firm was also reportedly planning an overhaul of iTunes that would mark one of the largest changes to the world’s biggest music store since its 2003 debut.
Rupert Murdoch’s News Corp. was once again in the spotlight, as shares declined 0.63% after the media giant’s board approved splitting the USD60 billion company into separate publishing and entertainment businesses. An announcement was expected later in the day.
Among earnings, Family Dollar plunged 3.36% after the retailer posted a smaller-than-expected gain in earnings, hurt by price cuts in order to compete with rivals such as Dollar General and Wal-Mart.
Other stocks in focus included Research in Motion, Nike and Accenture, all due to report earnings after the closing bell.
Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 dropped 0.72%, France’s CAC 40 declined 0.60%, Germany's DAX plummeted 1.45%, while Britain's FTSE 100 tumbled 1.17%.
During the Asian trading session, Hong Kong's Hang Seng Index edged up 0.2%, while Japan’s Nikkei 225 Index rallied 1.7%.
During early U.S. trade, the Dow Jones Industrial Average dropped 0.75%, the S&P 500 index declined 0.58%, while the Nasdaq Composite index tumbled 0.93%.
Market sentiment was hit after a German government official indicated that the EU summit would not result in any detailed decisions and warned against high expectations among investors ahead of the conclusion of the summit on Friday.
Adding to the negative tone, Italy saw long term borrowing costs rose to 6.19%, their highest level since December, following an auction of 10-year bonds, while the yield on Spanish 10-year bonds ticked up to 7%, the level that prompted Greece, Ireland and Portugal to seek bailouts.
In the U.S., the Department of Labor said the number of people who filed for unemployment assistance last week fell to a seasonally adjusted 386,000, compared to expectations for a decline to 385,000.
A separate report confirmed that the U.S. economy expanded at an annualized rate of 1.9% during the first quarter, in line with expectations.
Financial stocks were broadly lower, led by JP Morgan, down 3.21%, after the New York Times reported that the lender’s losses from credit derivatives may total as much as USD9 billion, exceeding the firm’s initial estimate.
JP Morgan CEO Jamie Dimon had said on May 10 that the bank lost more than USD2 billion on bets in credit markets taken by its chief investment office in London and that the loss could increase by as much as USD1 billion this quarter.
Shares in Citigroup plunged 2.51% in early trade and Goldman Sachs tumbled 1.72%, while Bank of America saw shares retreat 1.29%.
Elsewhere, shares in Google fell 0.60%, after Wells Fargo resumed its "outperform" rating on the tech giant. The company was also preparing to sell its first tablet from mid-July for USD199, hoping to replicate its smartphone success in a hotly contested market.
Also in the tech sector, Apple shares dropped 0.42%, amid reports that the company’s suppliers in China violated local labor laws when they imposed excessive overtime and skimped on insurance.
The computer technology firm was also reportedly planning an overhaul of iTunes that would mark one of the largest changes to the world’s biggest music store since its 2003 debut.
Rupert Murdoch’s News Corp. was once again in the spotlight, as shares declined 0.63% after the media giant’s board approved splitting the USD60 billion company into separate publishing and entertainment businesses. An announcement was expected later in the day.
Among earnings, Family Dollar plunged 3.36% after the retailer posted a smaller-than-expected gain in earnings, hurt by price cuts in order to compete with rivals such as Dollar General and Wal-Mart.
Other stocks in focus included Research in Motion, Nike and Accenture, all due to report earnings after the closing bell.
Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 dropped 0.72%, France’s CAC 40 declined 0.60%, Germany's DAX plummeted 1.45%, while Britain's FTSE 100 tumbled 1.17%.
During the Asian trading session, Hong Kong's Hang Seng Index edged up 0.2%, while Japan’s Nikkei 225 Index rallied 1.7%.