* S&P 500 ends below 200-day moving average
* Jobless claims unexpectedly fall, U.S. Sept. exports rise
* McDonald's drops after reporting lower Oct. global sales
* Dow off 0.9 pct, S&P 500 off 1.2 pct, Nasdaq down 1.4 pct
By Caroline Valetkevitch
NEW YORK, Nov 8 U.S. stocks fell on Thursday and
could be in line for more weakness as worries about Washington's
ability to find a timely solution to the "fiscal cliff" dominate
investor thinking in coming weeks.
The S&P 500 dropped for a second day and closed below its
200-day moving average for the first time in five months. The
moving average is a measure of the market's long-term trend, and
a significant break through that level would be seen as a sign
of weakness. Just minutes before the closing bell, stocks
accelerated their declines and the S&P 500 fell more than 1
McDonald's Corp shares fell 2 percent to $85.13
after the world's largest hamburger chain reported its first
monthly drop in global sales since March 2003. The stock's
weakness hurt the Dow, which fell through its 200-day moving
average on Wednesday.
"Most of the major indices are busting below or challenging
those trendlines. Typically those offer pretty strong support,
and I would be surprised to see the S&P 500 fall like a knife
through here," said Bruce Zaro, chief technical strategist at
Delta Global Asset Management, in Boston.
Apple shares sank for a second day. The stock fell
3.6 percent to $537.75 and is down more than 20 percent from its
Sept. 21 all-time intraday high of $705.07.
The Dow Jones industrial average lost 121.41 points,
or 0.94 percent, to 12,811.32 at the close. The Standard &
Poor's 500 Index fell 17.02 points, or 1.22 percent, to
1,377.51, ending at its lowest level since Aug. 2. The Nasdaq
Composite Index dropped 41.70 points, or 1.42 percent,
to close at 2,895.58.
Since reaching a 52-week closing high of 1,465.77 on Sept.
14, the S&P 500 has dropped 6 percent. On Wednesday, a day after
Democratic President Barack Obama defeated Republican Mitt
Romney in the U.S. election, the benchmark S&P 500 dropped more
than 2 percent for its biggest one-day percentage decline since
Investors worry that if no deal is reached in Congress over
some $600 billion in spending cuts and tax increases due to take
effect early next year, the struggling U.S. economy could fall
While a comprehensive agreement to avoid the automatic
spending cuts and tax increases of the "fiscal cliff" was
possible, a more likely scenario is for political leaders to
find a temporary fix to buy time until the new Congress and
Obama are sworn in, which will occur in January.
The prospect of haggling over the budget has deepened the
uncertainty for investors, who have sold stocks on the
expectation taxes will go up on capital gains and dividends.
"That's really what investors have been reacting to these
last two days," said Zaro. "It is this worry about the fiscal
cliff and the ability of politicians to come to a solution."
Because of those worries, the market is likely to keep
challenging support levels in the coming weeks, he said.
On the data front, the U.S. government reported a
better-than-expected drop in weekly first-time claims for
unemployment benefits as well as a rise in U.S.
While that news supported stock futures early in the U.S.
trading day, it was soon overshadowed by the U.S. fiscal
Qualcomm Inc was a bright spot, with the stock
ending up 4.4 percent at $60.67 after the leading supplier of
chips for cell phones reported quarterly revenue Wednesday that
Among other earnings reports, Whole Foods Market Inc
posted earnings that met expectations, but said Hurricane Sandy
was a drag on sales this quarter. Its shares slid 5.9 percent to
With results in from more than 440 companies, third-quarter
S&P 500 earnings are now seen down 0.2 percent from a year ago,
which is slightly better than the forecast at the start of the
reporting period. Results have been especially weak on the
revenue side, however, with just 38 percent of companies beating
on sales, Thomson Reuters data showed.