(Updates with U.S. stocks, fresh prices and quotes, changes
byline, dateline, previous LONDON)
NEW YORK, Feb 7 (Reuters) - U.S. stocks fell in choppy
trading on Thursday, extending a drop in European shares after
warnings from major technology companies heightened concerns a
slowing U.S. economy might hurt corporate earnings globally.
The euro and sterling hit two-week lows against the dollar
following interest rate decisions by their respective central
banks.
The European Central Bank left interest rates unchanged,
but bank President Jean-Claude Trichet later signaled looser
monetary policy ahead. The Bank of England cut interest rates
by one quarter of a percentage point, as expected.
A weaker-than-expected sales report from retailer Wal-Mart
<WMT.N> and warnings from network equipment maker Cisco Systems
Inc <CSCO.O> of disappointing third-quarter revenue growth
pressured Wall Street. In Europe, German chip maker Infineon
<IFXGn.DE> warned of further losses at its phone chips unit.
"Cisco's news is what started the breakdown in technology,"
said Victor Pugliese, director of listed equity trading at
Broadpoint Securities in San Francisco.
"In general, the market is very, very volatile ... there's
a lot of uncertainty."
The Dow Jones industrial average <> was down 24.63
points, or 0.20 percent, at 12,175.47. The Standard & Poor's
500 Index <.SPX> was up 0.21 points, or 0.02 percent, at
1,326.66. The Nasdaq Composite Index <> was down 3.53
points, or 0.15 percent, at 2,275.22.
An earlier recovery attempt by U.S. stocks and the looming
$9 billion auction of 30-year Treasury bonds pressured U.S.
government debt prices.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 11/32, with the yield at 3.65 percent, and the 30-year
bond <US30YT=RR> fell 32/32, with the yield at 4.41 percent.
ECB, BOE RATE DECISIONS.
The decision by the Bank of England to cut interest rates
by a quarter point did not help European stock sentiment
because it disappointed investors who had expected a bigger
half-percentage-point rate cut.
The FTSEurofirst 300 index <> declined 1.84 percent,
while the MSCI main world equity index <.MIWD00000PUS> fell
1.07 percent, coming close to January's 1-1/2-year low.
In the foreign exchange market, the euro <EUR=> fell 1.04
percent at $1.4469 while sterling slid 1.03 percent to $1.9397
<GBP=>.
The euro has come under pressure in the past couple of
sessions amid growing signs the economy in the 15-member bloc
is faltering.
The ECB's Trichet, speaking at a post-meeting news
conference, said euro zone growth risks were to the downside,
paving the way for lower interest rates ahead.
"Trichet is basically giving us the green light to sell
some more euros as he talks about downside risks to growth,"
said Steven Butler, director of FX trading at Scotia Capital in
Toronto. "The market now thinks it's a matter of when, not if,
the ECB will be cutting rates."
In the precious metals market, platinum <XPT=> raced to set
record highs again as supply problems in South Africa generated
strong demand from investors. Platinum rose as high as
$1,850.00 an ounce, gaining more than 20 percent since the
start of the year. Gold <XAU=> was slightly higher at $907.40
an ounce.
U.S. light sweet crude oil <CLc1> rose 53 cents, or 0.61
percent, to $87.67 per barrel.
(Additional reporting by Natsuko Waki and Sitaraman Shankar in
London and John Parry, Ellis Mnyandu and Vivianne Rodrigues in
New York; Editing by Jonathan Oatis)
