Stocks slide as Europe overshadows US economic news

Rising anxiety over the financial problems in Cyprus sent stock prices lower on Thursday.

The Dow Jones Industrial Average fell 90.24 points to 14,421.49. The Nasdaq composite index declined 31.59 points to 3,222.60 and the S&P 500 stock index was down 12.91 points to 1,545.80.

The declines came despite encouraging news about employment, rising home prices and a positive report about the direction of the economy. The Conference Board reported its index of leading economic indicators rose in February for the third consecutive month, a sign of expansion in the second half of the year.

Gold pushed higher on Thursday, up $6.30 to $1,613.80 an ounce. However, oil dropped $1.05 to $92.45 a barrel.

Oracle Corp. (Nasdaq: ORCL) plunged 9.7 percent after sales and earnings missed estimates. Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (NTSE: JNPR) slipped at least 2.2 percent amid an analyst downgrade. Guess? Inc. (NYSE: GES) fell 7.2 percent after its revenue forecast trailed projections. Yahoo! Inc. (Nasdaq: YHOO) added 3.5 percent as Oppenheimer & Co. upgraded the shares.

“There’s going to be on-again, off-again, troublesome news out of Europe and occasionally it’s going to cause the market some disruption,” Bruce Bittles, chief investment strategist at Milwaukee-based RW Baird & Co., which oversees $85 billion, said in a telephone interview.

“The U.S. economy can do somewhat better, but it will probably be in a slow growth mode for most of 2013. That’s how it’s been over the last four years and the market has done quite well in that environment.”

Equities slid Thursday as a purchasing managers’ index for Germany’s manufacturing industry unexpectedly fell this month while a measure of euro-area services and manufacturing output contracted more than forecast.

The European Central Bank said it may cut Cypriot banks off from emergency funds after Monday as the island nation’s president, Nicos Anastasiades, struggled to forge agreement on a plan to stave off financial collapse.

“We don’t feel anything has been solved in Europe in terms of the debt situation there,” Eric Thorne, who helps oversee about $6 billion at Bryn Mawr Trust Co. in Bryn Mawr, Penn., said in a phone interview. “Europe and the surrounding economies having trouble could well be the reason that the market decides to pause here for a while.”

Oracle led the slump in technology shares, tumbling 9.7 percent to $32.30. The largest database-software supplier reported sales and profit that missed analysts’ estimates as CEO Larry Ellison is being stymied by customers switching to Internet-based cloud systems, curbing their reliance on Oracle’s servers, databases and related programs.

Cisco declined 3.8 percent to $20.84 while Juniper Networks lost 2.2 percent to $18.89. The makers of networking equipment were cut to "underperform," an equivalent of "sell," from "market perform" at FBR Capital Markets. Increased competition means there will be a slow but “meaningful” reduction in the number of routers and switches deployed into networks, analyst Scott Thompson said in a note.

Jabil Circuit Inc. (NYSE: JBL) retreated 4.5 percent to $18.60. The contract electronics manufacturer forecast earnings excluding some items of 58 cents a share at most for the fiscal third quarter. That trailed the average analyst estimate of 61 cents in a Bloomberg survey.

Airgas Inc. (NYSE: ARG) dropped 5.2 percent to $97.96. The largest U.S. distributor of packaged gases said it may not meet its fiscal fourth-quarter earnings guidance after sales didn’t increase through February.

Guess slid 7.2 percent to $25.01. The maker of designer jeans forecast annual revenue of $2.6 billion to $2.64 billion, less than analysts’ estimates of $2.74 billion.

Yahoo (Nasdaq: YHOO), the largest U.S. web portal, rose 3.5 percent to $22.86. The shares were upgraded to "outperform," meaning investors should buy the shares, from "market perform" at Oppenheimer, which cited the value of Yahoo Japan shares and a possible initial public offering of Ltd. in the next 12 months.

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