Stocks Trade Lower After 5 Losing Weeks
NEW YORK (AP) — Banks and airlines are nudging stocks lower Monday, while economic worries continue to weigh on markets.
Airline stocks dropped after an industry group cut its profit estimate this year by half. The group blamed disasters in Japan, unrest in the Middle East and higher fuel prices.
Many banks are also falling, amid concern that the Federal Reserve may require them to set aside more cash to cover potential losses.
The Dow fell 10 points, or 0.1 percent, to 12,142 in early afternoon trading. The Standard & Poor’s 500 index dropped 3 points to 1,296. The Nasdaq composite fell 3 to 2,729.
Delta Air Lines Inc. and United Continental Holdings Inc. dropped more than 2 percent in early afternoon trading. American Airlines’ holding company AMR Corp. lost 3 percent. The International Air Transport Association estimates airlines will earn about $4 billion this year, down from $18 billion last year.
Citigroup Inc., Bank of America Corp. and Zions Bancorp fell more than 2 percent.
Lorillard Inc. dropped 7 percent, the most of any company in the S&P 500 index. The company makes the most popular menthol cigarette on the market, Newport. Investors are concerned that the Food and Drug Administration could ban menthol cigarettes.
The three stock indexes lost more than 2 percent last week. A dismal jobs report sent stocks sharply lower on Friday. The Labor Department reported that employers added only 54,000 new workers in May. The unemployment rate inched up to 9.1 percent from 9 percent.
The monthly jobs report reinforced earlier signs that the U.S. economy is slowing. High gas and food prices have cut into consumer spending and the earthquake and tsunami in Japan have slowed down supplies of industrial parts, hurting U.S. manufacturers.
The collection of weak economic data prompted many economists to lower their growth projections for the rest of the year.
(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)