NEW YORK » Another series of attacks in London unnerved Wall Street yesterday, sending stocks lower as investors looked past strong earnings and China's decision to revalue its currency.
"I think the London incident gave investors an excuse to take some money off the table after reaching new highs yesterday," said Peter Cardillo, chief strategist and senior vice president at S.W. Bach & Co. "Otherwise, the news was outstanding. The China revaluation is great news, and a step in the right direction. Earnings are coming in better than expected. Oil is down. But London gave the markets some jitters, certainly."
China's news that it would float its currency against a basket of other currencies was seen as positive -- possibly giving U.S. exporters more opportunities in China. The move was also seen as a boon to blue-chip companies, many of which have benefited from China's economic boom. Bonds fell sharply, however, on fears that higher import prices could spur inflation.
The Dow Jones industrial average dropped 61.38, or 0.57 percent, to 10,627.77.
Broader stock indicators were narrowly lower. The Standard & Poor's 500 index fell 8.16, or 0.66 percent, to 1,227.04, and the Nasdaq composite index slipped fell 9.97, or 0.46 percent, to 2,178.60. Both the S&P and Nasdaq set new four-year highs on Wednesday.
China's currency move sent bonds tumbling, with the yield on the 10-year Treasury note rising to 4.29 percent from 4.18 percent late Wednesday. The dollar fell against most major currencies following China's decision, which traders felt would benefit Asian and European currencies over the dollar. Gold prices were unchanged.
Earnings from major corporations were mostly positive. The technology sector got a boost as eBay Inc., the online auctioneer, posted a 53 percent increase in second-quarter earnings and trounced Wall Street profit expectations by 4 cents per share. EBay, whose stock was pummeled after a first-quarter earnings disappointment, soared 20 percent, or $7.23, to $42.10.
Fellow Dow component McDonald's Corp. had solid, if somewhat lackluster, earnings that came in above Wall Street's expectations. New menu items helped overcome a tax hit from repatriating international income. McDonald's fell 12 cents to $30.78.
Google climbed $1.94 to $313.94. Although its profit quadrupled, it fell $21.19 to $292.75 in extended trading after the company said it sees seasonal slowness in the third quarter.