U.S. stocks declined, after the biggest rally of the month in the Standard & Poor’s 500 Index, as optimism faded about the European Central Bank’s plan to lend euro-area banks a record amount for three years.
Oracle Corp. (ORCL) tumbled 13 percent after the second-largest software maker reported sales and profit that missed analysts’ projections. Walgreen Co., the largest U.S. drugstore chain, slumped 6 percent as profit trailed (WAG) analysts’ estimates after customers switched to rival drugstore chains. Research In Motion Ltd. (RIM) surged 12 percent on reports that Microsoft Corp. and Nokia Oyj considered a joint bid and Amazon.com Inc. had made separate overtures to buy the BlackBerry maker.
The S&P 500 decreased 0.4 percent to 1,236.97 at 9:39 a.m. New York time. The benchmark gauge for U.S. equities yesterday rallied 3 percent. The Dow Jones Industrial Average lost 30.12 points, or 0.3 percent, to 12,073.46 today.
“What the ECB is doing is just trying to prevent a disorderly deleveraging of European bank assets,” Barry Knapp, the New York-based head of U.S. equity strategy at Barclays Plc, said in a telephone interview. “By no means it solves the financing problem for Italy or Spain or for the banks.”
Stock-futures swung between gains and losses as the ECB awarded 489 billion euros ($645 billion) in 1,134-day loans, the most ever in a single operation and more than economists’ median estimate of 293 billion euros in a Bloomberg News survey. In the U.S., a report from the National Association of Realtors today likely will show that fewer existing homes were sold since 2007 than previously estimated, painting an even bleaker picture of the industry that precipitated the U.S. recession.
Housing Starts
Benchmark gauges rose yesterday as better-than-estimated housing starts added to expectations the world’s largest economy will weather Europe’s debt crisis. Yesterday’s gain trimmed this year’s decline in the S&P 500 to 1.3 percent. The measure was still down 9 percent from this year’s high in April amid concern that Europe’s crisis may slow down the global economy.
The head of the world’s biggest bond fund said he sees a more than one in three chance that the euro zone will break apart and trigger a financial crisis akin to the one that devastated the global economy in 2008.
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U.S. Existing Homes Sold Since ’07 Revised Down by 14%
The number of existing homes sold in the U.S. was revised down by an average 14 percent since 2007, the National Association of Realtors reported today, magnifying the depth of the slump that contributed to the last recession.
Purchases were revised down to 4.19 million for 2010, down 15 percent from a prior estimate of 4.91 million, the real estate agents’ group said in Washington. There was a comparable downward revision to inventory, and median prices were little changed from prior estimates.
“Since 2007, things began to diverge” with other housing data, Lawrence Yun, the group’s chief economist, said in a news conference today as the figures were released. “Nothing in the local markets changed, it was an aggregation problem.”
Purchases for 2007 were revised down by 11 percent, and by 16 percent in 2008 and 16 percent in 2009.
