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4:43 PM, Aug 18, 2011 --

  • NYSE down 284.29 (-3.83%) to 7,134.65
  • DJIA down 364.61 (-3.2%) to 11,045.60
  • S&P 500 down 43.80 (-3.67%) to 1,150.02
  • Nasdaq down 98.65 (-3.93%) to 2,412.28


GLOBAL SENTIMENT

  • Nikkei down 1.3%.
  • Hang Seng down 1.3%.
  • Shanghai Composite down 1.6%.
  • FTSE-100 down 2.6%.


DOWNSIDE MOVERS

(-) TRMD warns for possible wider FY loss.

(-) TXRH names new CEO.

(-) AKAM initiated with Underperform rating.

(-) NTAP continues evening slide that followed revenue miss, disappointing guidance.

(-) AVB prices shares.

(-) DLTR guidance straddles Street view.

(-) TRW downgraded.

(-) IVR prices shares.

(-) ANF gained then fell following earnings.

(-) JASO misses Q2 earnings estimates.

(-) KO to increase China investment.

(-) JDSU continues evening decline that followed disappointing guidance.

(-) CBOU pricing shares.

(-) IVR prices shares.

(-) HBC falls amid reports US regulators to step up scrutiny of Europe's largest banks.

(+) GENT continues evening slide that followed pulled NDA for Defibrotide.

(-) SJM tops with EPS but sales miss.

(-) BZH upgraded.

UPSIDE MOVERS

(+) SINA beats sales estimate.

MARKET DIRECTION

Stock averages end deep in the red, reflecting global investor fears over growth and the health of banks.

Morgan Stanley and Deutsche Bank cut their forecasts for global expansion and two Federal Reserve officials said the U.S. should not act to protect equity investors. The drop accelerated after U.S. government data showed jobless claims rose last week, while housing remained weak and the Philadelphia Fed regional growth index unexpectedly plunged.

Morgan Stanley cut its global gross domestic product growth forecast to 3.9% from 4.2% for 2011, and to 3.8% from 4.5% for 2012. "Our revised forecasts show the US and the euro area hovering dangerously close to a recession -- defined as two consecutive quarters of contraction -- over the next 6-12 months," Morgan Stanley's global economics team warned in a research note.

Today's slump comes after the failure of German Chancellor Angela Merkel and French President Nicolas Sarkozy to come up with concrete proposals to address the region's debt problems during a meeting earlier this week. Investors appear to have revived a rotation out of cyclical stocks in favor of safe-haven markets such as gold and U.S. Treasuries. The 10-Year T-bill fell below 2% to historic lows.

Economic news added to the sour mood. The Philly Fed's business outlook survey fell to negative 30.7 in August from 3.2 in July. This is the lowest reading since March 2009. Readings below zero indicate contraction in the region's factories.

The number of initial jobless benefit claims in the week ending Aug. 13 rose 9,000 to 408,000. The increase was larger than expected. The less-volatile four-week average fell 3,500 to 402,500.

Also reported, the consumer price index increased 0.5%, the largest monthly gain since March and slightly hotter than economists expected. The core CPI, which excludes food and energy costs, was up 0.2% in July, in line with expectations.

Commodities finished trading mixed as crude oil futures plunged amid a surge of worry over Europe's debt situation and the broader global economy. Those worries drove gold to close at a new record.

Light, sweet crude for September delivery finished down 5.9% to $82.38 a barrel. In other energy futures, heating oil was down 2.61% to $2.88 a gallon while natural gas was down 1.22% to $3.88 per million British thermal units.

Gold for August delivery finished up 1.7% to $1,8.22 an ounce. In other metal futures, silver was up 1.16% to $40.31 a troy ounce while copper traded up 1.06% to $4.05.

The US Dollar Index was down 0.4% to $73.72.

In company news:

Bank of America (NYSE:BAC) shares have pared much of the gains over the last several session, thanks to a new report that the bank may face up to $9 billion more in liabilities for faulty mortgages if a judge agrees with MBIA (NYSE:MBI) that it must buy back loans even if the errors didn't cause a default, Bloomberg reported.

Shares of Merck & Co. (NYSE:MRK) were down while Bloomberg reports that the U.S. Food and Drug Administration approved a generic version of the drug maker's Proscar and Propecia medication from Sun Pharmaceuticals - the largest drug maker in India by market value. The drugs treat hair loss and enlarged prostates in men.

Shares of Apple (NASDAQ:AAPL) were down while The Wall Street Journal reports the computer maker's Chief Financial Officer Peter Oppenheimer noted during a conference call with investors that companies should invent their own technology instead of buying it from outside the company. The comment came after a participant asked him about Google's (NASDAQ:GOOG) recent buy of Motorola Mobility (NYSE:MMI) for $12.5 billion. Oppenheimer said that "$12.5 billion is a lot of money," Apple blog AppleInsider reported.

One bright spot, DARA BioSciences (NASDAQ:DARA) was up, despite the bloodletting in the rest of the market after it said this morning that its investigational drug KRN5500 has been granted Fast Track designation by the FDA to treat chemotherapy-induced neuropathic pain in patients with cancer.

ADRs of HSBC Holdings (HBC) were down sharply while the Wall Street Journal says U.S. regulators will increase their scrutiny of Europe's largest lenders on concern that Europe's debt crisis may lead to a funding squeeze.

Shares of MGM Resorts (NYSE:MGM) were slumping sharply as the Wall Street Journal that its original owner, Kirk Kerkorian, has sold 20 million of his shares in the company, cutting his stake to 22% from 27%. MGM shares are down 10.8%, or $1.25, to $10.29.

In earnings news:

--Shares of Tech Data (NASDAQ:TECD) faltered after the technology products distributor said this morning that its second quarter sales were $6.45 billion with earnings per share of $1.10. Both were above the Street view for EPS and revenue of $0.95 and $6.13 billion, respectively. For Q3, the company said it expects year-over-year, mid-single-digit organic sales growth in both regions in local currencies.

Source: Stocks Lose on Economic, Banking Worries