Wall Street dips off five-year highs after Europe, Japan data
By Rodrigo Campos | February 15, 2013 3:14 AM EST
Stocks dipped on Thursday after traders cashed in some of their recent gains following weaker-than-expected economic growth data from Europe and Japan, though declines were limited by news on mergers and acquisitions.
A contraction of 0.6 percent in gross domestic product in the euro zone was the steepest for the bloc since the first quarter of 2009, while Japan's GDP shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth.
The persisting weakness in Europe and its implications for global growth and U.S. corporate profits prompted some investors to lock in recent profits.
The S&P 500 is still up more than 6 percent so far this year and is hovering near its highest level since November 2007.
U.S. data showed the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. That suggests the job market is improving, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
"But it won't be much of a catalyst for the market this morning because of ... the news out of Europe," he said.
Cardillo said a weaker euro, down 0.8 percent versus the U.S. dollar, was also a downward pressure on markets.
The Dow Jones industrial average <.DJI> fell 13.86 points or 0.1 percent, to 13,969.05, the S&P 500 <.SPX> lost 2.18 points or 0.14 percent, to 1,518.15 and the Nasdaq Composite <.IXIC> dropped 8.12 points or 0.25 percent, to 3,188.76.
Shrinking European economies translated to a 5-percent drop in revenue from the region for Cisco Systems
General Motors Co
Recent news on mergers and acquisitions led some investors to bid up shares of related companies.
H.J. Heinz Co
American Airlines and US Airways Group
(Additional reporting by Angela Moon; Editing by Bernadette Baum)