Wall Street Drops After Swiss Move; Banks Tumble

New York: US stocks fell, erasing small gains at the open on Thursday, as investors grappled with a move by the Swiss National Bank to scrap its three-year euro cap on the franc.

Trading was likely to remain volatile through the session, on the heels of choppy premarket action that saw futures fluctuate between gains and losses, after the SNB said it would discontinue the cap it introduced on September 6, 2011 to fight recession and deflation threats.

Swiss stocks traded in the US moved higher, including UBS, up 2.4 per cent at $16.87, Credit Suisse, up 3.2 per cent at $23.55 and Novartis, up 1.9 per cent to $98.64, as a strengthening Swiss franc made US-dollar denominated stocks cheaper.

"The Swiss move was obviously the big move, people are trying to get their arms around what it means for the US stock market," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

"It will take some of the morning to sort out the impact of the Swiss move across the board."

Financials, off 0.6 per cent, were the worst performing S&P sector. Bank of America lost 3.7 per cent to $15.45 after the second-largest US bank by assets reported a 14 per cent slump in quarterly profit. Citigroup shares fell 2.9 per cent to $47.64 after its quarterly results.

Dow component Intel Corp is scheduled to report after the market closes.

Expectations for US fourth-quarter earnings have fallen sharply in recent months, with growth now estimated at just 3.6 per cent compared with an October 1 estimate for 11.2 per cent, according to Thomson Reuters data.

The Dow Jones industrial average fell 64.12 points, or 0.37 per cent, to 17,362.97.

The S&P 500 lost 8.26 points, or 0.41 per cent, to 2,003.01.

The Nasdaq Composite dropped 28.73 points, or 0.62 per cent, to 4,610.59.

The benchmark S&P has fallen for four straight sessions and nine of the past 11 days. The index is down more about 4 per cent from its last record high December 29. The CBOE Volatility index is on track for a fifth day of gains.

US producer prices posted their biggest drop in more than three years in December, while weekly initial jobless claims rose, but still indicated an improving job market. Separately, New York Federal Reserve said its Empire State general business conditions index rose in January.

Best Buy shares tumbled 15.1 per cent to $33.88 as the worst performing S&P 500 component after the electronics retailer posted holiday sales results and said it expects same-store sales growth to be flat to negative in the first two quarters of its fiscal year.

US-listed shares of Blackberry dropped 15.8 per cent to $10.61 after South Korea's Samsung Electronics said it had no plan to buy the smartphone maker, denying a Reuters report on a takeover approach.

Declining issues outnumbered advancing ones on the NYSE by 1,389 to 1,361, for a 1.02-to-1 ratio; on the Nasdaq, 1,498 issues fell and 691 advanced for a 2.17-to-1 ratio.

The benchmark S&P 500 index was posting 18 new 52-week highs and 8 new lows; the Nasdaq Composite was recording 17 new highs and 22 new lows.

Copyright @ Thomson Reuters 2015