Three Major Indexes All Down Near 3%; Investor Concern Over Economy Grows

Stocks are extending losses at mid-day, with each of the major indexes down near 3% as investors react to a sell-off in Europe, while weak domestic retail sales and overall concern about the U.S. economy, which many experts believe has stalled. European markets plunged and Asian markets closed mixed as the market braces for the key government nonfarm payrolls report due tomorrow.

The number of Americans who applied for unemployment benefits edged down by 1,000 last week to 400,000, the Labor Department said. Economists surveyed by MarketWatch had expected new requests for benefits around that level. The average of new claims over the last four weeks, viewed as a more accurate gauge of the trend, declined by 6,750 to 407,750, the lowest level since mid-April.

European markets gave up early gains to end lower Thursday as sovereign debt worries continue to hang over the region. The Bank of England and the European Central Bank left their respective interest rates and other policy positions unchanged, as expected. Global markets are now closely listening for comments on the debt situation and economic growth. ECB chief Trichet is saying in recent remarks that downside risks may have intensified though he does expect ongoing economic growth and stresses that officials are closely watching bank liquidity.

In company news:

Shares of Kraft Foods ( KFT ) are up after the company beat earnings beat estimates, and the company said it would split itself into two listed companies. Kraft reports Q2 EPS of $0.55 compared to $0.53 a year earlier and operating EPS of $0.62. The Street looked for $0.58. Revenue grew 13% to $13.88 billion, about in line. Kraft lifted its outlook for organic net revenue growth for the year to at least 5% from at least 4% and also raised its operating earnings forecast to at least $2.25 a share from at least $2.20 a share.

Analysts had been expecting operating earnings for the year of $2.23 a share. Kraft said will break the company into two units, separating its global snacks brands into a standalone company while the other would be a grocery specialist focused on food and beverages.

ADRs of Sony Corp. ( SNE ) are down after Bloomberg reported that the electronics giant is planning to start sales of the PlayStation Vita portable player in Europe and the U.S. next year, after the all-important holiday shopping season. The product launch in Japan will be before the end of December while Europe and the U.S. are coming early next year. The holiday shopping season is considered key for the success of consumer electronics sales.

Bank of New York Mellon ( BK ) shares are down after The Wall Street Journal reported that it is preparing to charge large depositors to hold cash. The report characterized the move as the latest sign of concerns seeping through global markets. In a note to customers last week, the bank said it will start levying a fee on customers who have boosted their deposit balances.

Shares of Novavax ( NVAX ) are down despite positive study results on the company's A/H1N1 virus-like-particle pandemic influenza vaccine candidate in the journal Vaccine. Single administrations of the VLP vaccine induced high levels of HAI titers in subjects without pre-existing detectable immunity to the pandemic strain. Overall, the data indicated that NVAX's H1N1 VLP vaccine was well-tolerated and immunogenic.

In the latest earnings news:

--CVS Caremark ( CVS ) reports Q2 EPS of $0.60, in line with the per-share result from a year ago and shy of the Street view for $0.64. Revenue rose to $26.63 billion from $24 billion. The Street expected $26.76 billion.

--Shares of Transocean (RIG) are down sharply after the company said Q2 revenue was $2.334 billion, down from $2.479 billion in the year ago quarter. EPS was $0.48, down from $2.22 per share in the year ago quarter. According to an analyst survey by FactSet, net income was expected to be $0.80 on revenue of $2.33 billion.

--Shares of Prudential Financial (PRU) have downshifted from pre-market gainsafter it reported its Q2 figures. The company said Q2 EPS was $1.71, which beats by $0.16. Revenue increased 32% from the previous year period to $10.2 billion, which beats by $540 million.

Commodities are mixed. December gold contracts are up 0.56% to $1,676 an ounce, while September crude oil contacts are down 2.65% to $89.49 a barrel.

In energy ETFs, the United States Oil Fund (USO) is down 2.87% to $34.83 and the United States Natural Gas fund (UNG) is down 3.38%, to $9.99.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.52% at $162.35. Market Vectors Gold Miners (GDX) is down 4.02% to $56.82. iShares Silver Trust (SLV) is down 2.27% to $39.59.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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