* Investors fret over Argentina default fallout
* Exxon, Whole Foods both fall after results
* Jobless claims rise more than expected in latest week
* Indexes down: Dow 0.7 pct, S&P 0.8 pct, Nasdaq 0.9 pct
(Updates to open, adds Chicago PMI data)
By Ryan Vlastelica
NEW YORK, July 31 U.S. stocks slumped in a broad
decline on Thursday, with the Dow and S&P 500 turning negative
for July on concerns over the strength of overseas economies and
ongoing tensions with Russia.
Weak U.S. data contributed to the bearish tone as jobless
claims rose more than expected in the latest week, and the
Chicago Purchasing Managers Index unexpectedly fell in July to
its lowest since June 2013.
All ten primary S&P 500 sectors were down on the day, with
energy the biggest decliner with a drop of 0.9 percent.
About 82 percent of stocks traded on the New York Stock Exchange
fell, while 74 percent of Nasdaq-listed shares were lower.
The CBOE Volatility index rose 8.3 percent to 14.44,
well under its historical average of 20.
Portugal's Banco Espirito Santo slumped almost 40
percent to an all-time low as its hopes of raising capital
without state aid suffered a major blow after massive losses.
In Russia, Moscow fought back over new U.S. and EU sanctions
that had been imposed over the conflict with Ukraine, announcing
a ban on most fruit and vegetable imports from Poland.
Separately, Argentina defaulted for the second time in 12
years. Investors had hoped for a midnight deal with holdout
creditors in Argentina, but the plan fell through. Even a short
default will raise companies' borrowing costs, add to pressure
on the peso, drain dwindling foreign reserves and fuel one of
the world's highest inflation rates.
"Even though the default wasn't terribly unexpected, it
creates a concern of systemic risk," said James Dailey,
portfolio manager of TEAM Asset Strategy Fund in Harrisburg,
Pennsylvania. "On top of that, we haven't had any real downside
for a while, and anyone who tries to argue that the market isn't
at the very upper end of its historical range is flawed."
Argentinian stocks traded in the U.S. were lower, including
YPS SA, down 4.9 percent to $37.03 and Pampa Energy
, down 8.8 percent to $10.32.
The Dow Jones industrial average fell 122.34 points
or 0.72 percent, to 16,758.02, the S&P 500 lost 14.79
points or 0.75 percent, to 1,955.28 and the Nasdaq Composite
dropped 38.81 points or 0.87 percent, to 4,424.09.
The losses erased the Dow's and S&P's monthly gains, with
the Dow currently off 0.4 percent for July and the S&P off 0.2
percent. The Nasdaq is up 0.4 percent and remains on track for
its third straight positive month.
Dow component Exxon Mobil Corp posted second-quarter
earnings that beat expectations, but shares fell 1.5 percent to
Late Wednesday, Whole Foods Markets Inc cut its 2014
forecasts for a fourth time. Shares were down 4.6
percent at $37.30.
Cigna Corp reported second-quarter earnings that beat
expectations while Time Warner Cable Inc posted a rise
in both earnings and revenue. Cigna fell 6.2 percent to $87.66
while Time Warner Cable fell 1.1 percent to $149.79.
(Editing by Bernadette Baum)