Stocks drop in afternoon trading; gold plunges

Written by Muleskinner Staff

(NEW YORK, AP) – A steep fall in commodity prices pulled down energy and mining stocks for a second day on Monday. The Dow Jones industrial average dropped more than 160 points, putting it on course for its worst one-day loss since February.
Gold plunged below $1,400 an ounce for the first time in two years as a sell-off in metals continued from last week. Oil prices hit their lowest level since mid-December.
“I think you’re getting some panic selling right now,” said Frank Fantozzi, CEO of Planned Financial Services, a wealth management firm. “People who have been holding on to gold expecting a rebound are now thinking, ‘I better get out.'”
Shortly before 1 p.m., the Dow was down 164 points at 14,700, a drop of 1.1 percent. Caterpillar led the Dow lower, losing 3 percent to $82.67.
A report that China’s economy unexpectedly slowed pummeled copper and other commodities. The world’s second-largest economy expanded by 7.7 percent in the first three months of the year, well below forecasts of 8 percent or better.
Gold prices dropped $123 to $1,377, an 8 percent fall. Crude oil slid $2.50 to $88.78 in New York trading.
The plunge in commodity prices hit mining and energy stocks. Cliffs Natural Resources lost 7 percent to $17.95. Freeport-McMorRan Copper & Gold fell 8 percent to $29.52. Analysts at Citigroup placed a “sell” rating on the mining giant on the expectation that copper prices will continue sliding.
In other trading, the Standard & Poor’s 500 index slumped 18 points to 1,570, a loss of 1.2 percent. Of the 10 industry groups in the S&P 500, materials and energy stocks fared the worst, sliding 3 percent.
The Nasdaq composite fell 47 points, or 1.4 percent, to 3,248.
Among the stocks climbing higher, Citigroup rose 2 percent to $45.87, one of the best gains in the S&P 500. The country’s third-largest bank reported earnings that beat analysts’ estimates thanks to stronger revenue from trading and investment banking.
Sprint Nextel jumped after Dish Network offered $25 billion to buy the company. Dish’s bid is aimed at beating an offer from the Japanese phone company SoftBank. Sprint surged 13 percent to $7.01, while Dish fell 6 percent to $35.41.
Thermo Fisher Scientific offered to pay $13.6 billion to buy genetic testing equipment maker Life Technologies. Thermo Fisher agreed to pay $76 in cash for each share of Life Technologies. Both stocks jumped. Thermo Fisher rose 2 percent to $81.43, and Life Technologies rose 8 percent $73.15.
In the market for U.S. government bonds, the yield on the 10-year Treasury note dipped to 1.71 percent from 1.72 late Friday. The yield remains near its low point of the year, 1.69 percent, reached April 5 following news that U.S. employers hired far fewer workers than expected last month.