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United States News Title: U.S. Stocks Retreat on Concern Over Europe, Trading Systems May 7 (Bloomberg) -- U.S. stocks plummeted, with benchmark indexes erasing their gains for the year as concerns over Europe’s debt crisis and the integrity of American trading systems tempered optimism spurred by a surge in jobs growth. Hewlett-Packard Co. and Microsoft Corp. lost more than 4 percent each to lead the Dow Jones Industrial Average lower a day after the gauge plunged almost 1,000 points in intraday trading as waves of computerized trading exacerbated declines. Schlumberger Ltd. and Halliburton Co. paced a slump in energy shares as oil fell below $75 a barrel. Hansen Natural Corp. plunged 17 percent after reporting sales that missed analyst estimates. The Standard & Poor’s 500 Index, which plunged 3.2 percent yesterday, lost 1.6 percent to 1,110.44 at 10:38 a.m. in New York. The Dow average fell 124.32 points, or 1.2 percent, to 10,396. “There’s lack of confidence,” said Keith Wirtz, who oversees $18 billion as chief investment officer at Fifth Third Asset Management Inc. in Cincinnati. “Who wants to go long over the weekend? Europe is suffering the consequences of a deterioration in confidence. And over here, when I read about the computer glitch, I just felt intimidated.” Yesterday’s selloff briefly erased more than $1 trillion in market value. U.S. regulators plan to examine whether securities professionals triggered yesterday’s stock-market plunge or exploited the turmoil to profit illegally, two people with direct knowledge of the matter said. The SEC aims to determine if market participants accidentally or maliciously entered orders that derailed normal trading, the people said, declining to be identified because the inquiry isn’t public. The agency will also examine if controls to prevent the rout from snowballing weren’t in place at exchanges and firms. Canceled Trades Nasdaq OMX Group Inc. said it will cancel trades of 286 securities that fell or rose more than 60 percent from their prices at 2:40 p.m. New York time yesterday, just before U.S. equities plummeted. The biggest U.S. fund managers say the bull market in stocks should weather Europe’s widening sovereign debt crisis even as it spurs the largest surge in volatility since the collapse of Lehman Brothers Holdings Inc. Employment in the U.S. increased in April by the most in four years and the unemployment rate unexpectedly rose as thousands of people entered the labor force, indicating the recovery is becoming self-sustaining. Payrolls jumped 290,000 last month, more than the median estimate of economists surveyed by Bloomberg News, after a revised 230,000 increase in March that was larger than initially estimated, the Labor Department said. The jobless rate rose to 9.9 percent last month from 9.7 percent. ‘Still Bullish’ While equities may post more losses as countries from Greece to Spain struggle to cut deficits, managers at Birinyi Associates Inc. and First Citizens BancShares Inc. say declines are a buying opportunity. The biggest one-day retreat since April 2009 has made American stocks more attractive by reducing valuations as the economy and corporate profits recover, said Thomas Lee, chief U.S. equity strategist at JPMorgan Chase & Co. “Bulls are still bullish and bears are still bearish,” said Dan Greenhaus, chief economic strategist at Miller Tabak & Co. in New York. “The recent pullback wouldn’t be enough to change those views. Everything that’s going on reminds investors that the recovery is not going to be normal.” Energy stocks declined along with oil, as an index of those companies in the S&P 500 lost 1.9 percent. Halliburton fell 5.9 percent to $27.06, while Schlumberger retreated 3.8 percent to $62.89. CareFusion Corp. fell the most in the S&P 500, sliding 11 percent to $24.60. The provider of health-care products and services reduced its 2010 sales forecast as first-quarter profit missed analysts’ estimates. Hansen Natural Corp. slumped 17 percent to $35.31. The beverage maker reported first-quarter sales of $238.1 million, missing the average analyst estimate in a Bloomberg survey of $257 million.
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