Stocks fall back as World Bank cuts growth outlook

Published on NewsOK Modified: June 11, 2014 at 4:23 pm •  Published: June 11, 2014
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NEW YORK (AP) — The stock market fell back from record levels Wednesday because of a weaker forecast for global growth and concerns about airline profits.

Delta Air Lines and other carriers fell after Germany's Lufthansa warned of smaller profits. Boeing slid after analysts said that most of the good news about the plane maker was already priced into the stock.

Stocks opened lower after the World Bank predicted weaker global growth this year, citing a tough winter in America and the political crisis in Ukraine. The bank said late Tuesday that it expects the world economy to grow 2.8 percent this year instead of the 3.2 percent it predicted in January.

The report was a reality check for investors who had pushed major stock indexes to all-time highs this week amid optimism that the U.S. economy was strengthening. Stronger growth should translate into higher revenues and better results for U.S. companies.

Stocks "were going up so much in the last few days that they were due for a little breather," said Brad Sorensen, director of market and sector research at Charles Schwab.

The Standard & Poor's 500 index fell 6.90 points, or 0.4 percent, to 1,943.89. The index had closed at a record of 1,951.27 on Monday. The Dow Jones industrial average dropped 102.04 points, or 0.6 percent, to 16,843.88. The Nasdaq composite slipped 6.07 points, or 0.1 percent, to 4,331.93.

On Wednesday, airline stocks were among the big losers after Lufthansa warned of smaller profits caused by weaker passenger demand. Lufthansa AG cut its forecast for 2014 and 2015 operating income due to the weaker demand and strikes, among other reasons. Delta dropped $1.21, or 3 percent, to $40.71, making it the second-biggest loser among S&P 500 stocks.

Still, Delta's stock is up 48 percent this year, the most of any U.S. carrier.

United Continental fell $2.50, or 5 percent, to $45.26 and American Airlines slid $1.37, or 3 percent, to $42.29.

Boeing was another big decliner.

The plane maker's stock fell $3.15, or 2.3 percent, to $134.10 after analysts at RBC said that after three years of record orders and with no new planes in the pipeline, the good news for Boeing is "already out there."

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