(Bloomberg) — U.S. stocks fell, sending the Standard & Poor’s 500 to a 10-month intraday low, as data on manufacturing and home sales that trailed economists’ estimates fueled concern that the economic recovery is in peril.
Banks led shares of financial companies down for the biggest loss out of 10 groups in the Standard and Poor’s 500 Index as analysts at Bank of America Corp. slashed its second- quarter earnings-per-share estimates for Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase & Co., and Citigroup Inc., which all fell at least 0.9 percent. BP Plc rallied 3.7 percent on speculation the company is ahead of schedule in halting the Gulf of Mexico oil spill.
The S&P 500 lost 1.7 percent to 1,013.55, its lowest intraday level since September 2009, as of 11:01 a.m. in New York. The Dow Jones Industrial Average decreased 126.21 points, or 1.3 percent, to 9,647.81.
“Markets are down because we’re getting a little bit softer economic data,” said Michael Vogelzang, who helps manage $1.7 billion as chief investment officer at Boston Advisors in Boston. “Numbers are pretty much disappointing across the board. Home sales we were expecting to be soft for a while, so that’s the least amount of surprise.”
Index futures slid before the open of U.S. exchanges after the Labor Department said initial jobless claims increased by 13,000 to 472,000 in the week ended June 26, defying the median economist forecast for a decline to 455,000. The number of people receiving unemployment insurance rose, while those getting emergency benefits dropped after Congress failed to act on extending the legislation.
S&P 500’s Fall
The S&P 500 has tumbled 17 percent from this year’s high on April 23 on concern a sovereign-debt crisis in Europe and China’s moves to tame inflation will dent global growth. The gauge is 8.9 percent lower this year and has fallen for seven of the past eight days, trimming its valuation to about 15 times the reported earnings of its companies, near the cheapest level in a year, according to Bloomberg data.
Homebuyers Fade
BP’s U.S. shares rallied 4.6 percent to $30.22 even after the company said it’s sticking to its schedule for the relief wells needed to plug the leaking well in the Gulf of Mexico to be completed in August. Work continues to contain the spill, Sheila Williams, a London-based spokeswoman for BP, said by phone.
‘Ahead of Schedule’
“They are ahead of schedule,” said Fadel Gheit, an oil analyst at Oppenheimer & Co in New York. “They’re only a few hundred feet from the well right now. In less than two weeks they can be close to it, they are coming to the finish line, but once they come to it they will crawl, they will not run or walk. They do not want to leave any chance of failure. They would rather be very early but take a lot of time in the last two or three weeks.”
United Parcel Service Inc. climbed 0.4 percent to $57.12 and FedEx Corp. increased 0.2 percent to $70.22 after both were raised to “buy” from “neutral” at UBS AG.
Goldman Sachs fell 0.9 percent to $130.06. The most profitable firm in Wall Street history had its second-quarter earnings-per-share estimate slashed 51 percent by Bank of America Corp. analysts, who said the firm’s trading environment “rapidly deteriorated” since May.
Morgan Stanley slumped 2.8 percent to $22.57, JPMorgan Chase retreated 2.4 percent to $35.69, and Citigroup dropped 1.9 percent to $3.69 after their second-quarter earnings-per-share estimates were also cut.
Dendreon Drops
Dendreon tumbled 10 percent to $29. The Centers for Medicare and Medicaid Services is requesting public comments on the effects of Dendreon’s Provenge on patients with prostate cancer.
“We believe the worst case scenario contemplated here — an official CMS ruling not to reimburse for Provenge — is simply not supported by the facts,” Robert Baird analyst Raymond Christopher wrote in a note to clients today. The broker has an “outperform” recommendation on the shares.
Constellation Energy Group Inc. lost 0.7 percent to $32.03 after Barclays Capital downgraded the shares to “equal weight” from “overweight.”
Yahoo! Inc. gained 0.3 percent to $13.88 after the internet media company’s board authorized the repurchase of as much as $3 billion of the company’s shares over the next three years.
Smith & Wesson Holding Corp. climbed 4.4 percent to $4.27. The handgun manufacturer reported fourth-quarter adjusted earnings of 8 cents a share, beating analysts’ estimates of 4 cents a share.
Arena Pharmaceuticals Inc. soared 9.1 percent to $3.35 after Eisai Co. said it will sell the hunger-curbing lorcaserin drug from Arena in the U.S. if the obesity treatment is approved.
–With assistance from Adam Haigh, Mark Barton, Michelle Cortez and Trista Kelley in London. Editors: Michael P. Regan, Joanna Ossinger
To contact the reporter on this story: Kelly Bit in New York at kbit@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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