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Stocks sink after reports of European slowdown

Source : AP
Last Updated: Thu, Feb 14, 2013 16:15 hrs

Renewed worries about Europe overshadowed an encouraging U.S. jobs report, turning stocks mixed on Thursday.

The Dow Jones industrial rose four points to 13,987, an hour after the opening bell.

The broader S&P 500 index rose less than a point to 1,521. The Nasdaq composite index fell less than a point to 3,196.

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: Exports to Europe have averaged $2.7 billion a day.

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 2.6 percent. H.J. Heinz soared 20 percent.

The Labor Department said that the number of people applying for unemployment benefits for the first-time fell to 341,000, the lowest figure in three weeks and far below forecasts. Economists said the report offered more evidence that the 7.9 percent unemployment rate will head lower.

The stock market soared to start the year, nearing record highs. But it has drifted sideways over the previous week with little news to sway investors.

The S&P 500 index remains up 1.3 percent this month and has already gained more than 6 percent for the year.

In the market for U.S. government bonds, the yield on the 10-year Treasury edged up to 2.03 percent early Thursday from 2.02 percent the day before.

The 10-year yield, used to set a variety of borrowing rates, began the year around 1.70 percent. It has moved steadily higher as worries about a recession have eased. That has prompted traders to shift money out of the Treasury market. When traders sell bonds, yields rise.




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