By Anora Mahmudova and Sara Sjolin, MarketWatch
NEW YORK (MarketWatch) -- The selloff in U.S. stocks resumed on
Thursday, as fears that the market has farther to fall outweighed
better-than-expected earnings and upbeat economic reports.
Initial weekly jobless claims dropped to the lowest level in
more than 14 years, while industrial production climbed 1% in
September.
The S&P 500 (SPX) dropped 17 points, or 0.9%, to 1,844.91.
The Dow Jones Industrial Average (DJI) fell 118 points, or 0.7%, to
16,028. The Nasdaq Composite (RIXF) dropped 43.71 points, or 1%, to
4,171.71.
The main benchmark erased year-to-date gains and is a few
percentage points away from being in correction territory (i.e., a
decline of at least 10% from its peak). Read: Here's what drove the
market meltdown
Jeffrey D. Saut, Chief Investment Strategist at Raymond James in
a note wrote Wednesday's roller-coaster session was due to market
participants inability to manage their risk in July, when he
prematurely predicted that the market would see a 10%
correction.
"The time to raise cash was in the June -- August timeframe,
when the dollar took off and negative divergences mounted, not
now," wrote.
Earnings: The results season continued at full speed on
Thursday, with a heavy lineup ahead of the opening bell.
Goldman Sachs (GS) reported third-quarter earnings of $4.57,
beating a consensus estimate from FactSet of $3.21, but reported
higher expenses. Shares fell 2%.
Delta Air Lines (DAL) rose 2.6% after reporting third-quarter
results.
Tobacco maker Philip Morris International (PM) reported
third-quarter profit that topped expectations, but cut its
full-year outlook citing the negative impact from the currency
markets. Shares were little changed.
Toy maker Mattel Inc. (MAT) posted earnings and sales that fell
short of expectations as gross sales of its flagship Barbie doll
fell 21% world-wide. Shares dropped 4.6%.
UnitedHealth Group Inc. (UNH) reported third-quarter profit of
$1.63 a share, beating estimates of EPS of $1.53. Shares rose
4.5%.
Baker Hughes Inc. (BHI) shares dropped 9.4% after the
oil-field-services company reported earnings per share that fell
short of forecasts.
Movers and shakers: Netflix Inc. (NFLX) shares sank 23%, after
the video-streaming company on Wednesday said its new-subscriber
count fell short of its forecast of 3.69 million. It added 3.02
million new members during the quarter.
EBay Inc. (EBAY) lost 5% after the online retailer late
Wednesday reported third-quarter earnings fell to $673 million, or
54 cents a share, from $837 million, or 53 cents a share, in the
year-earlier period.
Apple Inc. (AAPL) was down 1.8%, ahead of a scheduled event
where the tech giant is expected to launch new iPads and the latest
in the iMac line.
Fed speakers: Investors will pay attention to several Fed
speakers. Charles Plosser, president of the Philadelphia Fed, in a
speech on Thursday warned that the Federal Reserve should hike
rates sooner rather than later to avoid a chance that inflation
will accelerate. He's a voting member of the Fed's policy committee
this year.
Dennis Lockhart, the president of the Atlanta Fed, in a speech
on Thursday, said the U.S. labor market remains far from normal
with many companies preferring to use part-time workers. Lockhart
will be a voting member of the Fed's policy committee in 2015.
Also a voting member, Minneapolis Fed President Narayana
Kocherlakota will speak on the objectives of monetary policy in
Billings, Mont. at 10 a.m. Eastern.
Finally, St. Louis President James Bullard will hold a Q&A
with Vox blogger Matthew Yglesias at 12:45 p.m. Eastern. Bullard
isn't a voting member this year.
Oil slide: Crude-oil futures continued their brutal decline on
Thursday, with the front-runner contract (CLX4) dropping below $80
a barrel, on track for the lowest settlement price since June 2012.
A Gulf official said U.S. oil prices could fall to around $70 a
barrel, suggesting that some in the Organization of the Petroleum
Exporting Countries see prices falling further.
Other markets: Europe's benchmark stock index dropped for an
eighth straight day, after closing 3.2% lower on Wednesday. Data
from Eurostat confirmed that inflation fell to an almost five-year
low of 0.3% in September. Read: European stocks slip into
correction amid 'perfect storm'
Asian markets closed mostly in the red, with the Nikkei falling
2.2%. Most metals traded lower, while the dollar rose against most
major currencies.
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