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Policy: Economy

Jet downing, weak earnings, rattled stock market

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Photo - FILE - In this Aug. 16, 2007 file photo, the flags on the facade of the New York Stock Exchange are a backdrop for a Wall Street street sign. European stocks were lower after most Asian markets abandoned modest gains Thursday July 17, 2014 ahead of U.S. economic data and corporate earnings reports. (AP Photo/Richard Drew, file)
FILE - In this Aug. 16, 2007 file photo, the flags on the facade of the New York Stock Exchange are a backdrop for a Wall Street street sign. European stocks were lower after most Asian markets abandoned modest gains Thursday July 17, 2014 ahead of U.S. economic data and corporate earnings reports. (AP Photo/Richard Drew, file)
News,Business,Economy

The stock market veered lower Thursday afternoon, weighed down by news that a passenger jet was shot down over Ukraine and by disappointing U.S. corporate earnings and housing data.

KEEPING SCORE: The Dow Jones industrial average slid 135 points, or 0.8 percent, to 17,002 as of 3:35 p.m. Eastern Time. The Standard & Poor's 500 index dropped 21 points, or 1 percent, to 1,960. The Nasdaq composite fell 63 points, or 1.4 percent, to 4,362. Mattel, SanDisk and AutoNation were among the biggest decliners, after they reported earnings. Many investors shifted money into gold and U.S. government bonds, traditional havens favored in time of geopolitical instability.

UKRAINE CRASH: A Malaysia Airlines passenger plane carrying 295 people was shot down over eastern Ukraine on Thursday, Ukrainian officials said, and both the government and the pro-Russia separatists fighting in the region denied any responsibility for downing the aircraft.

The crash brought new worries to financial markets about the region and Russia's standoff with the West over its annexation of the Crimean Peninsula.

SECTOR VIEW: The 10 sectors in the S&P 500 declined, led by industrial stocks. SanDisk fell the most of the 500 stocks in the index, losing 15.2 percent after the flash memory maker issued a disappointing outlook. SanDisk fell $15.20 to $92.62. Humana bucked the trend, and was the third biggest gainer in the index, rising $3.69, or 2.29 percent, to $131.12.

BONDS AND OIL: Many investors sought refuge in U.S. bonds, apparently concerned that the plane crash in Ukraine could ratchet up wider geopolitical instability in the region in the wake of recent U.S. sanctions against Russian individuals and companies. The yield on the 10-year Treasury note fell to 2.46 percent from 2.53 percent late Wednesday. Benchmark U.S. crude oil for August delivery jumped $1.24 to $101.20 a barrel in electronic trading on the New York Mercantile Exchange. Gold surged $2.70 to $1,299.60 an ounce.

MIXED PICTURE: Even before the jet crash, the market had eased early in the day after a pair of government reports showed an uneven U.S. recovery. The number of people seeking U.S. unemployment benefits fell last week, an encouraging sign about the labor market, however home construction fell in June to the slowest pace in nine months, a setback to hopes that housing will boost economic growth. Homebuilders slumped on the news. M/I Homes slid $1.40, or 6 percent, to $22.35.

"The housing starts numbers were weak, but housing has been incredibly volatile," said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research. "They were definitely disappointing."

AIRLINE STOCKS SLIDE: Several airline companies declined around the time that reports surfaced about the passenger plane being downed. American Airlines Group fell $1.67, or 3.8 percent, to $41.80, while Delta Air Lines slid $1.42, or 3.7 percent, to $36.45. United Continental shed $1.65, or 3.7 percent, to $43.25.

MICROSOFT LAYOFFS: Microsoft said early Thursday it will eliminate up to 18,000 jobs over the next year as it works to integrate the Nokia business it bought in April. The company has about 127,000 employees now. Microsoft's stock added 63 cents, or 1.4 percent, to $44.70.

WRONG TURN: AutoNation's second-quarter earnings rose 12 percent, but fell short of Wall Street's expectations. The stock of the nation's largest auto dealership chain fell 9 percent.

TROUBLED TOYLAND: Mattel fell 7.6 percent after the toy maker reported that its income plunged 61 percent in the second quarter, weighed down by costs tied to its acquisition of Mega Brands.

NO QUIERO KFC: Yum Brands shares slid 5.6 percent a day after the operator of Taco Bell, Pizza hut and KFC reported higher second-quarter earnings but also sluggish sales in the U.S. at Pizza Hut and KFC chains.

SELLING HIGH: Stocks remain near record territory. The Dow set a record high close on Wednesday, its second this month, and the S&P 500 is hovering near its July 3 all-time high. That may have encouraged investors to sell some of their stock holdings Thursday, said Darrell Cronk, deputy chief investment officer for Wells Fargo Private Bank.

"It's more of some position-squaring and a little bit of profit-taking over the next couple of days as we continue to set new highs," Cronk said.

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