After snapping an eight-day losing streak, bad economic news had the Dow Jones Industrial Average plunging in early trading by more than 230 points, or about 2%, to under 11,665. This had been the worst stretch for the Dow since October 2008 as continuing problems with the United States and European economies plague the financial markets. Italy and Spain are now in the frontline of debt woes in Europe, with Greece, Ireland and Portugal still unresolved. Decliners outnumbered advancers by more than 5-to-1.
Bank of America (NYSE:BAC) fell by more than 3% to around $9.20, shedding more than 30 cents a share. The worst-performing stock on the Dow this year, Bank of America is trading more than 25% below its 200-day moving average and is down more than 13% for the month after reporting second-quarter earnings that were poorly received. Recently, Bank of America had rallied, but today’s selling is taking it all back as the stock is at a new year low.
Alcoa (NYSE:AA) plunged by more than 3% as reports from China on falling production dragged down the aluminum maker by 50 cents per share to sell for under $13.70. Down double digits for the month, Alcoa also is trading more than double digits beneath its 20-, 50- and 200-day moving averages.
The Big Cat continued to be plowed under as Caterpillar (NYSE:CAT), the world’s largest heavy equipment maker, fell more than 3.35%, a drop of more than $3.20, to less than $92.80 per share. Caterpillar is now trading about 11% below its 20-day moving average and about 11% below its month high.
Proctor & Gamble (NYSE:PG) was up early but unable to hold onto its gains, falling about 4 cents to under $60.70 a share. Tomorrow, Proctor & Gamble reports earnings. It is down about 2.35% for the week.
An announced spinoff took Kraft Foods (NYSE:KFT) more than $1 higher to over $36.25 per share, about a 3.5% pickup. Kraft Foods, supported by Warren Buffett, the company’s largest shareholder, will split into two divisions. One will focus on North America and the other on international snack brands.
Safety stock McDonald’s (NYSE:MCD) rose more than 60 cents to over $86, gaining about 0.7%. Strong earnings for the second quarter, positive analyst recommendations and news reports touting it as a safe haven for investors has MCD soaring over Wall Street as riskier equities take a beating.
Jonathan Yates does not own any of the stocks mentioned in this article.
