NEW YORK (AP) — Stocks slid Thursday after reports that a meeting planned for the weekend between European leaders to fend off a credit crisis may be delayed. The reports overshadowed an unexpected recovery in manufacturing in the Northeast.
The Dow Jones industrial average fell 63 points, or 0.5 percent, to 11,441 at 11:20 a.m. Eastern.
Investors are concerned that differences between the leaders of Germany and France may hold up an agreement on how to protect European banks from the likelihood of a default by the Greek government.
Officials from the 17 countries that share the euro are scheduled to meet at a summit this Sunday to discuss ways to contain the damage. A messy default by Greece could to huge losses for European banks that hold Greek bonds. If that leads them to pull back on lending to each other, investors fear it could cause another freeze in global credit markets like the one in late 2008 after Lehman Brothers collapsed.
The S&P 500 fell 7, or 0.6 percent, to 1,202. The Nasdaq lost 30, or 1.2 percent, to 2,573.
U.S. indexes had edged higher in early trading after the Federal Reserve Bank of Philadelphia said regional manufacturing was “showing signs of recovery.” Its index of manufacturing, shipments and new orders was far better than economists had forecast.
Other economic reports were mixed. The Labor Department said new applications for unemployment benefits dropped to 403,000 last week, a sign that layoffs are easing. On the down side, sales of previously-occupied homes fell 3 percent last month.
Several large companies reported earnings before the market opened. Union Pacific Corp., the nation’s largest railroad, surged after its earnings came in well ahead of analysts’ estimates. The company gained 5.3 percent after reporting that its income jumped 16 percent, more than analysts had forecast. It also said it expects the growth to continue. .
Southwest Airlines rose 3.2 percent after reporting income that was a penny per share higher than analysts predicted. AT&T Inc. lost 1 percent after reporting that the number of new iPhones activated last quarter was the lowest in a year and a half.
The New York Times jumped 4 percent after the company reported higher profits than expected.
Microsoft Corp. will report earnings after the market closes.