US stocks drop on fears over euro’s outlook
US stocks declined yesterday, taking a step back from their recent advance, prompted by comments by the ECB president on the euro and Europe’s outlook.
The euro currency dropped against the safe-haven dollar and yen, spurring a retreat from risky assets such as stocks, after European Central Bank president Mario Draghi said the exchange rate was important to growth and price stability. Investors took that as a sign the bank is concerned about the euro’s advance and its effect on the region’s economy.
Growth sectors were among the weakest performers on the S&P 500: the S&P 500 materials index was down 0.6 per cent while the S&P energy index was down 0.5 per cent. Housing stocks also declined, with a housing sector index off 1.4 per cent.
Despite the day’s decline and weakness earlier this week, the stock market has been in an almost uninterrupted rising trend for most of the year, with the S&P 500 up 5.8 percent so far for 2013.
Many analysts say some weakness at this point is no surprise.
“Given the amount the market moved in January, having a little bit of a pullback and some consolidation… would be a healthy sign,” said Eric Marshall, of Hodges Capital Management in Dallas.
Top US retailers reported strong January sales after offering discounts that drew in shoppers facing a hit to their take-home pay from higher payroll taxes. But an index of retailers was down 0.3 per cent.
The Dow Jones industrial average was down 42.47 points, or 0.30 per cent, at 13,944.05. The Standard & Poor’s 500 Index was down 2.73 points, or 0.18 per cent, at 1,509.39. The Nasdaq Composite Index was down 3.34 points, or 0.11 per cent, at 3,165.13.