Stocks mixed as Europe's economy slows
Published Thursday, February 14, 2013 12:40PM EST
Last Updated Thursday, February 14, 2013 1:43PM EST
NEW YORK -- Renewed worries about Europe overshadowed an encouraging U.S. jobs report, and stocks flipped between slight gains and losses on Thursday.
Germany's economy shrank in the final three months of last year. The slowdown in Europe's largest economy deepened the recession across the region, pulling down European stock markets. Sales to Europe have been a boon to U.S. companies.
Shortly before 1 p.m. E.S.T., the Dow Jones industrial average was down 18 points to 13,964.
The U.S. stock market started off the year strong but has drifted sideways over the previous week with little news to sway investors. That calm could disappear soon, said Doug Cote, chief market strategist at ING U.S. Investment Management.
"Everybody is too complacent," Cote said. "There's this sense that we have an all-clear signal, but it doesn't bear out with recessions in Europe and Japan and a negative fourth-quarter GDP print in the U.S. I'm bracing for some volatility in the near future."
Cisco Systems tugged the Dow lower, falling 1 per cent. The world's largest maker of computer networking equipment reported earnings late Wednesday that surpassed Wall Street's expectations. But it predicted sales growth that was weaker than previous estimates. Cisco's stock lost 28 cents to $20.86.
The broader S&P 500 index fell less than a point to 1,520. The Nasdaq composite index rose a point to 3,198.
The number of people applying for unemployment benefits fell to 341,000 last week, an indication that unemployment could head lower.
In a handful of deals announced Thursday, American Airlines and U.S. Airways agreed to merge in an $11 billion deal, creating the world's largest airline. Warren Buffet and an investment group plan to buy ketchup maker H.J. Heinz for $23 billion.
US Airways Group's stock sank 8 per cent to $13.54. H.J. Heinz soared 20 per cent to $72.51.
The S&P 500 index remains up 1.4 percent this month and has already gained more than 6 per cent for the year.
In the market for U.S. government bonds, the yield on the 10-year Treasury edged up to 2.04 per cent early Thursday from 2.02 per cent the day before.
The 10-year yield, used to set a variety of borrowing rates, began the year around 1.70 per cent. It has moved steadily higher as worries about a recession ease. That has prompted traders to shift money out of the Treasury market. When traders sell bonds, yields rise.