U.S. Stocks Fall On Worries About Europe’s EconomyMarch 29th, 2012 12:23 pm Associated Press
NEW YORK (AP) — Stocks fell Thursday for the third day in a row as investors were daunted by reminders that Europe has not solved its debt crisis and the U.S. economy is far from healed, despite progress on both fronts.
The Dow Jones industrial average fell 71 points by midday to 13,055. The broader Standard & Poor’s 500 fell 12 points to 1,394. The Nasdaq composite index fell 28 to 3,077.
The declines came despite incrementally good news about the U.S. economy. The government said that the number of people seeking unemployment benefits last week dropped by 5,000 to about 359,000, the lowest since April 2008
The government also said that the U.S. economy grew at an annual rate of 3 percent in the fourth quarter, which met analysts’ expectations and was the fastest pace since spring 2010.
But there was reason for concern, too: The government said that many more people than it originally estimated filed unemployment claims in recent months. And economists believe the country’s growth has now slowed to about 1.5 percent.
The market’s rally this year has been driven by improvement in the U.S. economy. Now, “investors are pausing to examine whether the growth is real,” said Lawrence Creatura, a Rochester, N.Y., portfolio manager at Federated Investors.
Investors also may be waiting to see companies’ earnings for the first three months of the year. The earnings season traditionally kicks off with Alcoa, which reports April 10.
“We’re in that odd period of silence,” Creatura said. “It’s like a bad Western movie where one guy turns to the other and says, ‘It’s quiet out here,’ and the other says, ‘Yeah, too quiet.’ That’s what today feels like it.”
The yield on the 10-year Treasury note fell to 2.17 percent from 2.21 percent. The yield often drops when more people put their money into the perceived safety of bonds, which can be a sign they are pessimistic about the economy.