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US stocks slide on global economic worries

By Daniel Wagner

Associated Press

Published: Thursday, July 12 2012 8:20 a.m. MDT

FILE- In this Tuesday, July 10, 2012, file photo, Douglas Johnson, a trader for Getco Securities from Levittown, Pa., works during early trading at the New York Stock Exchange. U.S. share futures also pointed down Thursday July 12, 2012 ahead of the New York open. The Dow industrials index was off 0.34 percent in pre-market trading at 12,493.00 and the Standard & Poors 500 fell 0.55 to 1,328.90.

Bebeto Matthews, File, AP Photo

Enlarge photo»

Simmering fear about the European debt crisis and the weakening global economy pushed U.S. stocks lower for a sixth straight day Thursday.

Spain's borrowing costs edged higher, a sign that investors fear it might default. Spain's neighbors are rescuing the country's banks, but the government itself was not bailed out and bond investors are not satisfied. Stocks in Spain plunged more than 2 percent.

Greece continues to struggle. Its government said unemployment there continues to rise and hit 22.5 percent in April.

In Asia, traders are concerned that China's economy is growing more slowly and might deprive the world of a crucial economic engine. New numbers due out on Friday are expected to show that growth in the second quarter fell to 7.3 percent from the previous quarter's 8.1 percent — already a three-year low. Revenue from the construction, shipbuilding and export manufacturing industries might have been cut in half since last year.

The Dow Jones industrial average fell 88 points to 12,516 in the first half-hour of trading. 3M plunged $2.20, or 2.5 percent, to $85.65. Demand for the manufacturing conglomerate's products would weaken if the global economy faltered.

The Standard & Poor's 500 index fell 13 to 1,328. The Nasdaq composite average fell 39 to 2,848.

Supermaket operater Supervalu plunged by nearly half after the company reported a sharp drop in net income late Wednesday and suspended its dividend. Supervalu, which owns Albertsons, Jewel-Osco, Save-A-Lot, lost $2.42 to $2.88.

Supervalu's losses dragged on rival grocery chain Safeway, which fell $1.61, or 9 percent, to $16.37. Safeway's was the biggest percentage decline in the S&P 500 index.

Stocks fell despite an early government report that new claims for unemployment benefits in the U.S. fell to a four-year low last week. It was the third straight decline and the lowest level since March 2008.

Also Thursday, the euro fell to two-year lows as fed-up investors questioned the region's ability to solve its debt crisis conclusively. The euro fell to $1.2165 and is down about five cents already this month.

Among the other companies making big moves:

— Marriott International dropped 4 percent. The hotel operator reported revenue late Wednesday that fell short of analysts' expectations. The company also cut its prediction for fees it would make from in-room services like wireless Internet. The stock fell $1.64 to $36.39.

— Progressive, an auto insurance company, fell 4 percent after reporting a 52 percent drop in second-quarter income, partly due to an investment loss. The results were far weaker than analysts had expected. Progressive fell 77 cents to $19.78.

Daniel Wagner can be reached at www.twitter.com/wagnerreports /

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