S&P 500 poised for worst monthly drop since September on economy

May 31 (Bloomberg) -- U.S. stocks fell, sending the Standard & Poor’s 500 Index toward its biggest monthly decline since September, amid disappointing economic reports.

Joy Global Inc., a maker of mining equipment, slumped 7.7 percent after cutting earnings and revenue forecasts. TiVo Inc. slid 5.5 percent as the digital video recorder pioneer reported a loss. Facebook Inc. lost 2.2 percent, extending a 26 percent decline since it went public this month. Talbots Inc. almost doubled as the retailer agreed to be bought by Sycamore Partners for $369 million including debt.

The S&P 500 retreated 0.8 percent to 1,303.02 at 10:06 a.m. New York time. The Dow Jones Industrial Average dropped 56.23 points, or 0.5 percent, to 12,363.63 today.

“There’s less of a growth backstop to the global economy,” said Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion. “The U.S. has held the position of stabilizing factor amid all the concern about Europe’s crisis. To the extent that the latest numbers suggest that momentum in the U.S. is slowing, that will make investors more nervous.”

Equities fell as data showed gross domestic product climbed at a 1.9 percent annual rate from January through March, down from a 2.2 percent prior estimate. The number of Americans applying for unemployment insurance payments rose last week to a one-month high. Companies in the U.S. added 133,000 workers in May, according to ADP Employer Services, missing estimates. The Institute for Supply Management- Chicago Inc. said today its barometer decreased to 52.7 from 56.2 in April. Readings greater than 50 signal growth.

‘Just OK’

“Bottom line, as also seen in the ADP report, the labor market is no better than just OK,” Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, wrote in a note.

Investors also watched the latest developments in Europe’s attempts to tame its crisis. Spanish and Italian bonds gained as polls suggested Irish voters will back Europe’s fiscal treaty. Concern about Europe’s debt turmoil drove the S&P 500 down 6.8 percent so far in May. Financial, commodity and technology companies have fallen at least 8 percent in the period. The gauge is on pace for a second straight monthly decline, following the best first-quarter gain since 1998.

Joy Global retreated 7.7 percent to $54.51. It cut forecasts as mining companies reduced capital expenditure amid concern over the slowdown in Chinese economic growth.

TiVo lost 5.5 percent to $8.47 as hardware costs rose and the company said legal expenses in the current period would lead to a wider loss than analysts expected.

Page 1 of 2 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome