Investing.com - U.S. stocks dropped on Thursday on concerns that
labor costs are on the rise in the U.S. while fears that
Argentina's default on its debts may roil markets with contagion
fears adding to the selloff.
At the close of U.S. trading, the Dow 30 fell 1.88%, the S&P
500 index fell 2.00%, while the NASDAQ Composite index fell
The Volatility S&P 500 index, which measures the outlook for
market volatility, was up 27.16% at 16.95.
Argentina earlier failed to agree to debt restructuring terms
with creditors and fell into its second default since 2002, which
sent stocks prices tumbling despite solid U.S. data.
Fears the Argentine default will roil markets already sensitive
to conflict in Ukraine, Gaza and elsewhere in the Middle East
bruised all three major indices.
Rising labor costs in the U.S. exacerbated the meltdown by
reminding investors interest rates will go up in the U.S. possibly
at a time when the global economy faces clouds on its horizon.
The Labor Department reported earlier that its employment cost
index rose by 0.7% in the three months to June after a 0.3%
increase in the first quarter. Economists had expected a 0.5%
The Labor Department also reported that the number of
individuals filing for unemployment assistance in the U.S. last
week rose by 23,000 to 302,000 from the previous week's total of
279,000. Analysts had expected jobless claims to rise by 22,000 to
Hopes that Friday's July jobs will report will come in solid
took a backseat to Argentine financial woes and fears of subsequent
Leading Dow Jones Industrial Average performers included
Coca-Cola Company (NYSE:KO), down 0.80%, Microsoft Corporation
(NASDAQ:MSFT), down 0.86%, and Procter & Gamble Company
(NYSE:PG), down 1.02%.
The Dow Jones Industrial Average's worst performers included
Exxon Mobil Corporation (NYSE:XOM), down 4.15%, American Express
Company (NYSE:AXP), down 3.20%, and Nike Inc (NYSE:NKE), down
European indices, meanwhile, ended the day lower.
After the close of European trade, the DJ Euro Stoxx 50 fell
1.60%, France's CAC 40 fell 1.53%, while Germany's DAX fell 1.94%.
Meanwhile, in the U.K. the FTSE 100 fell 0.64%.
On Friday, markets will move on the U.S. nonfarm payrolls and
the unemployment reports, while the Institute of Supply Management
is to release data on manufacturing activity.
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