By Sarah Jones and Rita Nazareth
Jan. 10 (Bloomberg) -- U.S. stocks retreated, sending the Standard & Poor?s 500 Index down a third day, as renewed concern that indebted European nations will struggle to repay their deficits drove up the cost of insurance against debt defaults.
KB Home declined 2.8 percent as Credit Suisse Group AG cut the homebuilder?s stock rating. Strayer Education Inc. slumped 25 percent after forecasting less profit than analysts estimated after enrollment plunged. DuPont Co. dropped 2.7 percent after the company agreed to acquire Danisco A/S. Duke Energy Corp. lost 1.3 percent after agreeing to buy Progress Energy Inc. for $13.7 billion.
The S&P 500 dropped 0.6 percent to 1,264.24 at 9:34 a.m. in New York. The Dow Jones Industrial Average slid 59.90 points, or 0.5 percent, to 11,614.86. The Markit iTraxx SovX Western Europe index, which measures the cost of credit-default swaps, climbed a fourth day.
?The focus for the market this week is an array of bond issuance and this will increase sensitivity to euro-area debt concerns,? said London-based Ioan Smith, director at Knight Capital Europe Ltd.
The S&P 500 fell on Jan. 7 after the U.S. added fewer jobs than forecast and US Bancorp and Wells Fargo & Co. lost a pivotal foreclosure case. Even so, the benchmark gauge has still advanced for six straight weeks, the longest streak since April, as stronger-than-estimated data lifted confidence in the world?s largest economy.
Europe Debt
Portugal, Spain and Italy are scheduled to sell debt this week following a slump in euro-area government bonds last week. The European Central Bank bought Portuguese government bonds, according to three traders with knowledge of the transactions. The ECB also purchased Irish securities, said two of the traders, who asked not to be identified because the deals are confidential. The central bank bought Greek debt, one of the people said. An ECB spokesman in Frankfurt declined to comment.
Alcoa Inc. will be the first company in the Dow average to report fourth-quarter earnings today after the close of U.S. trading. S&P 500 companies posted better-than-estimated results in all three quarters reported so far for 2010, and analysts predict they?ll climb 14 percent in 2011, according to data compiled by Bloomberg News.
KB Home fell 2.8 percent to $14.82. The Los Angeles-based homebuilder that targets first-time buyers was cut to ?underperform? from ?neutral? at Credit Suisse Group AG, which cited the expectation for lower margins.
New Student Enrollment
Strayer Education slumped 25 percent to $114.51. The for- profit college said winter new student enrollment declined 20 percent from a year ago and 2011 earnings may be $8.80 to $9 a share. Analysts estimate $11.01 a share, according to the average forecast in a Bloomberg survey.
DuPont fell 2.7 percent to $48.44. The chemical company agreed to acquire Danisco for $5.8 billion, beating approaches from rival suitors for the Danish maker of enzymes used in food and biofuels.
Duke Energy dropped 1.3 percent to $17.56. The Charlotte, North Carolina-based company will buy Progress Energy Inc. for $13.7 billion, surpassing Southern Co. as the largest U.S. utility. Owners of Progress will get 2.6125 shares of Duke for each of their shares, the companies said today in a statement.
Playboy Enterprises Inc. climbed 17 percent to $6.09. The multimedia entertainment company said it has entered into a definitive agreement with Icon Acquisition Holdings LP, a limited partnership controlled by Hugh M. Hefner, to take the company private for $6.15 per share.
Ford Motor Co., revealing three new electric or hybrid vehicles to the public today, plans to hire more than 7,000 workers in the next two years, including engineers with expertise in battery-powered cars.
Ford will hire 4,000 factory workers and 750 engineers this year and add 2,500 hourly workers next year, Mark Truby, a company spokesman, said today in an interview in Detroit. Mark Fields, Ford?s president of the Americas, will announce the hiring plans later today, Truby said. Ford shares rose 0.3 percent to $18.32.
--With assistance from Keith Naughton in Detroit. Editors: Joanna Ossinger, Nick Baker
To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.
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