Stocks fell on Thursday, following a global selloff inspired by weak German economic data and ongoing uncertainty in Cyprus.
The S&P 500 closed at 1,545.80, down 12.91 points or 0.8 per cent – the setback coming just a day after the broad index came within 0.5 per cent of hitting a record high. The decline marks the worst one-day dip since Feb. 25 and takes the index to a two-week low.
The Dow Jones industrial average closed at 14,421.49, down 90.24 points or 0.6 per cent. In Canada, the S&P/TSX composite index closed at 12,747.87, down 78.68 points or 0.6 per cent.
European stocks were also weak, with the U.K.’s FTSE 100 falling 0.7 per cent and Germany’s DAX index ending the day down 0.9 per cent.
An index of Germany manufacturing activity for March slipped to 48.9, putting it in contraction territory and stirring concerns that the euro zone’s largest economy is struggling. Germany’s services sector also fell, with an index reading of just 51.6.
In Cyprus, lawmakers continued to struggle over arranging a bailout, after rejecting a proposal earlier this week from the euro zone and then being rejected by Russia. The European Central Bank has said that it may cut off Cypriot banks from emergency funding after Monday, if a bailout plan didn’t emerge by then.
U.S. news was far more upbeat. Existing home sales in February rose 0.8 per cent, to an annualized pace of nearly 5 million. Initial jobless claims for the period ended last week rose by 2,000, to 336,000 – but the results were better than expected.
Yet, earnings news weighed on sentiment, a day after FedEx Corp. slumped with disappointing quarterly results. This time, Oracle Corp. plunged 9.7 per cent after reporting adjusted quarterly earnings of 65 cents (U.S.) a share, below estimates. Its revenues also missed expectations.
Among key commodities, gold rose to $1,614.57 (U.S.) an ounce, up $7.74. Crude oil fell to $92.37 a barrel, down 59 cents. Suncor Energy Inc. fell 0.4 per cent and Barrick Gold Corp. rose 2.4 per cent.
Lululemon Athletica Inc. rebounded 1.4 per cent, even as it said that its product recall would hit its full-year profit by as much as $40-million. The shares fell sharply earlier this week, when the yoga-wear retailer said it was removing a popular yoga pant from store shelves because it was “too sheer.”
Research In Motion Ltd. was hardly changed, even as the stock was downgraded by Byron Capital Markets to a “hold” recommendation from “buy” – though largely because the share price was approaching his target of $18.