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U.S. Stocks Open Lower Amid Euro Zone Concerns and Financial Legislation

Strategic Insights

— 2 min read

U.S. stocks opened lower on Friday as concerns over the fiscal viability of the euro zone intensified and new U.S. financial legislation advanced. The Dow Jones Industrial Average fell 130 points, or 1.2%, to 10,651 in early trading, with financial components sinking due to the U.S. Senate's approval of measures opposed by credit and debit-card issuers. The financial and technology sectors led the decline, with American Express, Bank of America, J.P. Morgan, Intel, Hewlett-Packard, and Cisco Systems all experiencing significant losses.

Key Takeaways:

  • The Dow Jones Industrial Average fell 130 points, or 1.2%, to 10,651 in early trading.
  • Financial components sank after the U.S. Senate approved measures opposed by credit and debit-card issuers, with American Express, Bank of America, and J.P. Morgan all experiencing losses.
  • The financial and technology sectors led the decline, with the Nasdaq Composite falling 1.2% and the Standard & Poor's 500-stock index slipping 1.1%.
  • The euro dropped to a 17-month low at $1.2464 due to economic data from Europe, which raised questions about the country's ability to grow out of its massive debt burden.
  • Retail sales rose 0.4% in April, but some of that demand may have been driven by the government's homebuyer tax credit, which expired at the end of last month.
  • Several retailers, including Nordstrom and J.C. Penney, reported disappointing earnings, while Dillard's rose 6.6% after its first-quarter profit rose due to cost-cutting.
  • Credit-card issuers weakened after the Senate voted to allow the Federal Reserve to regulate fees on debit card transactions, with Visa tumbling 9% and MasterCard falling 7.5%.

Statistics:

  • 130: The Dow Jones Industrial Average fell 130 points, or 1.2%, to 10,651 in early trading.
  • 1.2: The Dow Jones Industrial Average fell 1.2%.
  • 10,651: The Dow Jones Industrial Average closed at 10,651 in early trading.
  • 1.2464: The euro dropped to a 17-month low at $1.2464.
  • 0.4: Retail sales rose 0.4% in April.
  • 0.1: The expected decrease in retail sales in April.
  • 2.7: Nordstrom slid 2.7% after its profit missed analysts' estimates.
  • 2.2: J.C. Penney slipped 2.2% after its first-quarter earnings rose but its second-quarter and full-year outlook disappointed analysts.
  • 6.6: Dillard's rose 6.6% after its first-quarter profit rose due to cost-cutting.
  • 9: Visa tumbled 9% after the Senate voted to allow the Federal Reserve to regulate fees on debit card transactions.
  • 7.5: MasterCard fell 7.5% after the Senate voted to allow the Federal Reserve to regulate fees on debit card transactions.

Sources:

  • Euclid Infotech Pvt. Ltd.
  • Syndigate.info
  • Albawaba.com

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