(AP) Stock indexes drift lower as Europe fears loom
By MATTHEW CRAFT
AP Business Writer
The Dow Jones industrial average and other stock indexes drifted lower Thursday after a meeting of European leaders failed to deliver any new steps to ease the region’s debt crisis.
The Dow dropped 54 points to 12,443 shortly before 3 p.m. Eastern. Fears that Europe’s troubles could turn into a worldwide financial crisis has pushed the 30-stock average down nearly 6 percent this month, erasing most of its gains for the year.
U.S economic news offered little encouragement. Orders for long-lasting factory goods edged up in April, but a key category that tracks business investment spending fell for a second straight month. The number of people applying for unemployment benefits dipped last week.
Hewlett-Packard gained 2 percent, leading the Dow. The personal computer maker plans to purge 27,000 employees, nearly 8 percent of the company’s payroll. H-P expects the layoffs, part of a turnaround program under CEO Meg Whitman, to save $3 billion or more.
European leaders wrapped up their latest summit Thursday with no new concrete steps to fix the continent’s financial crisis, even as worries rise about a messy Greek exit from the euro currency union.
Markets in Europe recovered from a huge sell-off the day before. Germany’s DAX rose 0.5 percent and the CAC-40 in France 1.2 percent.
In U.S. trading, the Standard & Poor’s 500 index slid seven points to 1,312. The Nasdaq composite index fell 30 points to 2,819.
Fears that Greece will drop the euro and set off a wider financial crisis have driven traders out of stocks and into the Treasury market this month. The surge in demand for Treasurys has knocked yields to all-time lows.
As a result, the U.S. federal government has been borrowing from bond markets at ever cheaper rates. The Treasury auctioned off seven-notes Thursday afternoon at 1.20 percent, the lowest rate on record.
Airline stocks jumped, led by a 9 percent gain in US Airways Group. Analysts at JPMorgan Chase expect a drop in jet-fuel prices over the past three months to lift airlines’ profits. Southwest Airlines climbed 4 percent after the company said it plans to offer international flights from Houston’s Hobby Airport. Delta Air Lines also rose 4 percent.
Among other stocks making big moves:
_ Tiffany & Co. plunged 7 percent after the luxury retailer cut its 2012 sales forecast, citing slower spending growth in the U.S. and other countries.
_ Data-storage company NetApp Inc. sank 13 percent. NetApp expects much weaker profit in the current quarter as a result of “increasing uncertainty” in the global economy.
_ Pandora Media surged 14 percent after the online radio provider reported a smaller quarterly loss than analysts had expected. Ad sales and subscriptions soared over the year before. Pandora said it accounted for nearly 6 percent of all radio listening in the U.S.