- NEW YORK (Reuters) - U.S.
stocks suffered one of the sharpest declines of 2004 on Thursday, knocking
the blue-chip Dow below the psychologically key 10,000 level as crude in
New York resumed its march higher, chasing investors from equities.
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- The drop in stocks accelerated late in the afternoon,
with selling triggered by the close of oil futures on the New York Mercantile
Exchange near the new record high set earlier in the session, and well
above $44 per barrel.
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- "Oil spiked back up, and closed at its highs,"
a hedge fund trader said, explaining the drop in stocks late in the session.
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- Caterpillar Inc. weighed on the blue-chip Dow as contract
talks continued between the world's largest heavy equipment maker and the
United Auto Workers.
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- Wal-Mart was another drag on the Dow, as the world's
largest retailer said July sales were not fueled by its namesake discount
stores. July sales from U.S. retailers largely met modest expectations,
but failed to excite most investors.
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- But it was the jump in oil prices that grabbed the spotlight.
Stocks have closely mirrored the change in crude oil futures, with the
stock market falling when oil futures rise.
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- The Dow had its second-worst day of the year, falling
1.61 percent, behind the March 11 sell off of 1.64 percent prompted by
the deadly Madrid train bombing.
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- The Dow Jones industrial average dropped 163.48 points
to 9,963.03, according to the latest data. The Standard & Poor's 500
Index was down lost 17.93 points, or 1.63 percent, to 1,080.70. The technology-laced
Nasdaq Composite Index tumbled 33.43 points, or 1.8 percent, to 1,821.63.
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- The S&P 500's fall was the steepest decline since
Sept. 24, 2003, when it tumbled 1.91 percent.
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- Trading was active, with 1.40 billion shares changing
hands on the New York Stock Exchange, in line the 1.4 billion daily average
for last year. About 1.57 billion shares were traded on Nasdaq, below the
1.69 billion daily average last year.
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- Decliners outnumbered advancers on the NYSE and Nasdaq
by almost 3-to-1.
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- World oil prices rebounded to record highs on Thursday
after the Russian government barred oil major YUKOS from access to its
bank accounts, threatening its ability to continue exports.
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- On the New York Mercantile Exchange, crude oil for September
delivery jumped to a record high of $44.50 a barrel, the highest level
in the 21 years of U.S. oil futures trading, before settling at $44.41,
up $1.58.
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- Friday's release of U.S. employment data for July could
take some of the focus off of oil. Economists polled by Reuters expect
nonfarm payrolls -- a key measure of the economy's strength -- to rise
by 228,000 jobs after June's modest gain of 112,000.
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- Early on Thursday, the Labor Department said the number
of people filing for initial U.S. jobless aid fell to 336,000 in the week
ended July 31 as the pace of layoffs slowed and the job market brightened.
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- Caterpillar was lower as the UAW, Caterpillar's largest
union, had threatened to strike at noon unless a tentative agreement was
reached. But the more than 9,000 Caterpillar workers remained on the job
on Thursday afternoon.
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- The stock fell $2.08, or 2.9 percent, to $69.62.
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- Wal-Mart's stock fell $1.15, or 2.2 percent, to $52.05.
The company said July sales were largely in line with expectations, but
most of the strength came from its Sam's Club warehouse stores and not
the namesake discount stores, which account for the bulk of Wal-Mart's
sales and profits.
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- Shares of clothing retailer Gap Inc. fell after the company
posted sales below expectations and slashed its profit forecast. Its shares
dropped $1.59, or 7.4 percent, to $19.79.
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- Boston Scientific Corp. on Thursday said it was recalling
an additional 3,000 of its Taxus heart stent systems after pulling 85,000
of the devices from the market last month.
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- The medical technology company fell $2.41, or 6.6 percent,
to $33.90.
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- Sharper Image Corp dropped after it cut its profit outlook,
as sales barely grew at the personal and home electronics retailer despite
an advertising push. It fell $6.06, or 24 percent, to $19.43.
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- Additional reporting by Brendan Intindola
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