September 28, 2012 / 3:51 PM / 6 years ago

US STOCKS-Wall Street retreats on last day of quarter; Spain eyed

* S&P on track to end Q3 with a gain of more than 5 percent

* Chicago PMI weaker than expected

* U.S. shares of RIM rally on results, Nike drops

* Consumer spending rises in August on gas prices

* Indexes down: Dow 0.8 pct, S&P 0.7 pct, Nasdaq 0.7 pct

By Chuck Mikolajczak

NEW YORK, Sept 28 (Reuters) - U.S. stocks fell on Friday as investors locked in gains at the close of a robust third quarter for equities and amid uncertainty ahead of the results of stress tests on Spanish banks.

Spain’s budget and reform plans had sparked a rally in the prior session, though the bank stress-test results and a review of Spain’s credit rating by Moody’s, both due later in the day, could compound the nation’s challenges in dealing with its debt.

“Yesterday we had a nice lift from Spain and some of their budgeting cuts and this morning it’s almost like the air is being let back out of the balloon with the bank stress tests and the rating review,” said Michael Mcgervey, president of McGervey Wealth Management in North Canton, Ohio.

“I see Europe more as a threat and if they get themselves into a situation where they are really going to stress the banks, then they are going to pull down the global markets.”

Adding to investors skittishness was another round of disappointing domestic economic data, following a weaker-than-expected read on the Institute for Supply Management-Chicago’s index of Midwest business activity, which fell to 49.7 in September from 53.0 in August.

The final read on the Thomson Reuters/University of Michigan survey on consumer sentiment was also less than expected, though it advanced to its highest in four months.

Recent flare-ups of protests in Greece and Spain against austerity plans have also heightened investor concerns as they could impede make political maneuvering.

The Dow Jones industrial average was down 111.61 points, or 0.83 percent, at 13,374.36. The Standard & Poor’s 500 Index was down 10.17 points, or 0.70 percent, at 1,436.98. The Nasdaq Composite Index was down 20.60 points, or 0.66 percent, at 3,116.00.

Trading was light on the last day of the quarter, when money managers reposition their portfolios. The S&P has advanced 5.5 percent over the past three months.

All ten S&P sectors fell, though losses were limited in technology as Accenture PLC climbed 6.4 percent to $69.54 after forecasting full-year earnings higher than analysts’ estimates as it bolsters its outsourcing business.

Also in the tech arena, U.S. shares of Research in Motion rocketed 11.2 percent to $7.94 on the back of a smaller-than-expected quarterly loss.

Nike Inc warned of slowing orders in China, the latest company to caution on how economic weakness in the Asian giant was impacting its business. Shares fell 0.8 percent to $95.26.

Wall Street’s gains in the quarter were largely linked to expectations for measures by central banks around the world to boost their economies.

The S&P is down 1.6 percent this week so far, putting the index on track for its second consecutive weekly decline and worst weekly percentage drop since early June as markets have found few catalysts to justify a move higher after the Fed’s latest stimulus plan on Sept. 13.

U.S. consumer spending rose in August by the most in six months as households stretched to pay for higher gasoline prices, according to a Commerce Department report.

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