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VOL. 38 | NO. 28 | Friday, July 11, 2014

Stocks decline in afternoon trading; Mattel down

ALEX VEIGA, AP Business Writer

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U.S. financial markets veered lower in afternoon trading Thursday, giving back gains from a day earlier. Economic data were mixed and company earnings reports were mostly disappointing. Investors also monitored developments in Ukraine following reports that a passenger plane was shot down over the eastern part of the country.

KEEPING SCORE: The Dow Jones industrial average fell 27 points, or 0.2 percent, to 17,110 as of 1:21 p.m. Eastern Time. The Standard & Poor's 500 index shed six points, or 0.3 percent, to 1,974. The Nasdaq composite slid 23 points, or 0.5 percent, to 4,402.

MIXED PICTURE: Government reports about the economy were inconclusive. The number of people seeking U.S. unemployment benefits fell last week, an encouraging sign about the labor market, however home construction fell in June to the slowest pace in nine months, a setback to hopes that housing will boost economic growth. Homebuilders slumped on the news. M/I Homes fell the most, sliding 98 cents, or 4.1 percent, to $22.77.

"The housing starts numbers were weak, but housing has been incredibly volatile," said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research. "They were definitely disappointing."

SELLING HIGH: Stocks remain near record territory. The Dow set a record high close on Wednesday, its second this month, and the S&P 500 is hovering near its July 3 all-time high. That may have encouraged investors to sell some of their stock holdings Thursday, said Darrell Cronk, deputy chief investment officer for Wells Fargo Private Bank.

"It's more of some position-squaring and a little bit of profit-taking over the next couple of days as we continue to set new highs," Cronk said.

MICROSOFT LAYOFFS: Microsoft said early Thursday it will eliminate up to 18,000 jobs over the next year as it works to integrate the Nokia business it bought in April. The company has about 127,000 employees now. Microsoft's stock added 87 cents, or 2 percent, to $44.95.

WRONG TURN: AutoNation's second-quarter earnings rose 12 percent, but fell short of Wall Street's expectations. The stock of the nation's largest auto dealership chain fell $3.54, or 5.8 percent, to $57.29.

TROUBLED TOYLAND: Mattel fell 6.4 percent after the toy maker reported that its income plunged 61 percent in the second quarter, weighed down by costs tied to its acquisition of Mega Brands. The stock shed $2.50 to $36.53.

MISSED THE STREET: Industrial manufacturing and engineering company Colfax reported second-quarter profit and revenue below Wall Street expectations. The stock slid $3.62, or 5 percent, to $69.08.

AIRLINE STOCKS SLIDE: Several airline companies tumbled around the time that reports surfaced about a passenger plane carrying 295 people being shot down Thursday over eastern Ukraine. The stocks pared some of their losses by afternoon. American Airlines Group fell 63 cents, or 1.4 percent, to $42.85, while Delta Air Lines slid 49 cents, or 1.3 percent, to $37.38. United Continental shed 57 cents, or 1.3 percent, to $44.33.

SECTOR VIEW: Eight of the 10 sectors in the S&P 500 declined, led by industrial stocks. SanDisk fell the most of the 500 stocks in the index, losing 13.6 percent after the flash memory maker issued a disappointing outlook. SanDisk fell $13.60 to $94.23. Humana bucked the trend to lead the index's risers $6.05, or 4.8 percent, to $133.48.

EUROPE AND ASIA: Global stock markets were mixed. Britain's FTSE 100 rose 1.1 percent, while the CAC-40 in France dropped 1.2 percent. Germany's DAX fell 1.1 percent. In Asia, Japan's Nikkei 225 edged down 0.1 percent. Hong Kong's Hang Seng was flat and China's Shanghai Composite fell 0.6 percent.

BONDS AND OIL: Bond prices rose. The yield on the 10-year Treasury note fell to 2.48 percent from 2.53 percent late Wednesday. Benchmark U.S. crude oil for August delivery jumped $1.59 to $102.79 a barrel in electronic trading on the New York Mercantile Exchange.

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