In an about-face from Tuesday’s big rally on domestic economic news, stocks headed down Wednesday. News that shook up European markets moved across the pond to take a toll on U.S. markets — and in particular the Dow Jones — until a late rally managed to cut down the losses.
A European Union report showed that a key business climate indicator fell in March, extending a downturn that began in September 2011. Combined with fears of a bank run in Cyprus when banks open on Friday, the report was more than enough to scare off investors. Helping to fan the flames was a domestic National Association of Realtors report that showed pending home sales fell 0.4% in February, despite growth estimates of 2%.
For the day, the damage was mixed, as a late rally managed to allow the Nasdaq to eke out a 0.12% gain and close at 3,256.52, while the S&P 500 rallied late to close down a fraction at 1,562.85. The Dow dropped 0.23% to finish at 14,526.16.
The biggest Dow loss was at JPMorgan (NYSE:JPM), which dropped just under 2% as federal prosecutors look into concerns the company ignored warning signs of fraud in the 2008 Bernie Madoff Ponzi scheme. German banking giant Deutsche Bank (NYSE:DB) also took a tumble, falling nearly 3% on concerns it will have its credit rating lowered.
Cliffs Natural Resources (NYSE:CLF) took a beating, down nearly 14% as the stock — the worst performer in the S&P 500 this year — was hit by both Morgan Stanley and Credit Suisse with lowered price targets.
Retailer Francesca’s (NASDAQ:FRAN) declined nearly 6% after announcing that members of its management team in addition to private-equity investor CCMP Capital plan to sell more than 7 million shares.
A number of tech stocks did manage to buck the day’s trend. AOL (NYSE:AOL) improved by more than 8% on an “overweight” upgrade from Barclays while VMware (NYSE:VMW) rose over 3% on an upgrade to “strong buy” at brokerage firm ISI. Facebook (NASDAQ:FB) gained more than 3% on no particular news.
Finally, Goldman Sachs (NYSE:GS) shares rose just under 1% as Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A, BRK.B) traded in warrants issued in 2008 for around 10 million shares in the company. Berkshire is now one of the top 10 shareholders at GS.
- Tempur-Pedic (NYSE:TPX): Up 7% ($3.26) to $50.07.
- Gramercy Capital (NYSE:GKK): Up 6.2% (28 cents) to $4.82.
- Deckers Outdoors (NASDAQ:DECK): Up 4.6% ($2.31) to $52.52.
- Rackspace (NYSE:RAX): Down 4.4% ($2.29) to $49.74.
- Millennial Media (NYSE:MM): Down 3.1% (21 cents) to $6.63.
- Dollar General (NYSE:DG): Down 2.4% ($1.27) to $50.95.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities.