Wall Street Falls On Europe, Japan GDP

Category: Markets / Finance / Feb 14, 2013 11:06AM EDT
U.S. stocks dipped on Thursday (February 14) after traders cashed in some of their recent gains following weaker-than-expected economic growth data from Europe and Japan, though declines were limited by news on mergers and acquisitions. A contraction of 0.6 percent in gross domestic product in the euro zone was the steepest for the bloc since the first quarter of 2009, while Japan's GDP shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth. The persisting weakness in Europe and its implications for global growth and U.S. corporate profits prompted some investors to lock in recent profits. The S&P 500 is still up more than 6 percent so far this year and is hovering near its highest level since November 2007. U.S. data showed the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. The Dow Jones industrial average fell 13.86 points or 0.1 percent, to 13,969.05, the S&P 500 lost 2.18 points or 0.14 percent, to 1,518.15 and the Nasdaq Composite dropped 8.12 points or 0.25 percent, to 3,188.76. Shrinking European economies translated to a 5-percent drop in revenue from the region for Cisco Systems, which nonetheless beat estimates as it reported its results Wednesday. The company's shares slid 2.6 percent to $20.60 (USD). General Motors Co reported a weaker-than-expected fourth-quarter profit, also citing bigger losses in Europe alongside lower prices in its core North American market. Still, shares rose 1.3 percent to $29.05. Recent news on mergers and acquisitions led some investors to bid up shares of related companies. H.J. Heinz Co shares jumped 20 percent after it said that Warren Buffett's Berkshire Hathaway and 3G Capital will buy the company for $72.50 a share, or $28 billion including debt. American Airlines and US Airways Group said they plan to merge in a deal that will form the world's biggest air carrier, with an equity valuation of about $11 billion. US Airways shares fell 2.4 percent to $14.31. Ringing the New York Stock Exchange opening bell was "Banana Joe", a five-year-old Affenpinscher who won Best in Show at the 137th Westminster Kennel Club Dog Show in New York on Tuesday (February 12). Joe was in good hands, being held by his handler Ernesto Lara and surrounded by other members of the Westminster Kennel Club. (Video Source: Reuters)