Stocks slide on Wall Street for sixth straight day

U.S. stocks slid for a sixth day Thursday as concern spread that weaker global economic growth and the European debt crisis will hurt U.S. corporate earnings. The Dow Jones industrial average and Standard & Poor's 500 index had their longest losing streaks since mid-May.

Billionaire investment guru Warren Buffett set a gloomy tone before the market opened, telling CNBC that weak demand is hurting his retail, jewelry, carpet and other businesses. He said business in Europe has dropped off quickly in the past two months.

Other companies appear to be struggling as well. Aluminum maker Alcoa, which kicked off the second-quarter earnings season on Monday, reported very weak revenue because of the faltering global economy. Fastenal, a U.S. industrial distributor, reported revenue Thursday that was weaker than analysts were expecting.

Hotel operator Marriott and Progressive, an insurance company, both plunged after reporting weak financial results.

Traders also sweated about Europe's debt crisis and new Chinese economic data due out Friday.

The Dow fell as much as 112 points in early trading. It recovered to turn briefly positive in the afternoon before closing with a loss of 31.26 points, or 0.3 percent, at 12,573.27. Dow component 3M fell $1.44, or 2 percent, to $86.41. Demand for the manufacturing conglomerate's products would weaken if the global economy faltered.

The S&P 500 fell 6.69 points, or 0.5 percent, at 1,334.76. The Nasdaq composite index fell 21.79, or 0.8 percent, to 2,866.19.

Supermarket operator Supervalu plunged by nearly half after the company reported a sharp drop in net income late Tuesday and suspended its dividend. Supervalu, which owns Albertsons, Jewel-Osco and Save-A-Lot, lost $2.60 to close at $2.69.

Supervalu's losses dragged on rival grocery chain Safeway, which fell $2.25, or 13 percent, to $15.73. Safeway's was the biggest percentage decline in the S&P 500 index.

The weak corporate results will likely prompt analysts to lower their quarterly earnings forecasts for the entire S&P 500, said John Fox, co-manager of the FAM Value Fund, which specializes in small and medium-sized companies.

"There will be more disappointments than surprises," Fox said. "It's a global world, and many of the small companies we invest in do business all over the world," he said, adding that his firm already is using estimates that are below Wall Street's consensus.

Fox said Buffett sounded far more negative than he has over the past year. At Berkshire's last annual meeting, which Fox attended, Buffett declared that all but a handful of the conglomerate's companies were doing better.

"The tone of his comments has definitely changed, which I think is a fair reflection of the environment," Fox said.

In Europe, Spain's borrowing costs crept higher, a sign that investors fear the country might default. Spain's neighbors are rescuing the country's banks, but the government itself was not bailed out and bond investors are not satisfied. Spain's main stock index closed down 2.6 percent.

Greece continues to struggle. Its government said unemployment there continues to rise and hit 22.5 percent in April.

The euro fell to a two-year low as fed-up investors questioned the region's ability to solve its debt crisis conclusively. It fell as low as $1.2165 and is down about five cents already this month.

A stronger dollar is another threat to U.S. corporate earnings, Fox said, because it makes U.S. goods more expensive to overseas buyers. Later, when companies convert those sales back into dollars, the unfavorable exchange rate shrinks the value of revenue earned overseas.

Traders also are concerned that China's economy is growing more slowly and might deprive the world of a crucial economic engine. New numbers due out on Friday are expected to show that growth in the second quarter fell to 7.3 percent from the previous quarter's 8.1 percent, which is already a three-year low. Revenue from the construction, shipbuilding and export manufacturing industries might have been cut in half since last year.

Among the companies making big moves:

? Marriott International dropped 6 percent. The hotel operator reported revenue late Wednesday that fell short of analysts' expectations. The company also cut its prediction for fees it would make from in-room services like wireless Internet. The stock fell $2.45 to $35.58.

? Progressive, an auto insurance company, fell 5 percent after reporting a 52 percent drop in second-quarter income, partly due to an investment loss. The results were far weaker than analysts had expected. Progressive fell $1.02 to $19.53.

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Daniel Wagner can be reached at www.twitter.com/wagnerreports/

Source: http://news.yahoo.com/stocks-slide-wall-street-sixth-straight-day-151627834--business.html

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