(By Balachander) U.S. stocks closed sharply lower as downbeat earnings and sales forecast from a number of companies outweighed encouraging news coming out of Europe.
S&P 500 Index dropped 0.81 percent to finish at 1,341.48. The Dow Jones Industrial Average shed 0.65 percent to end at 12,653.12. The Nasdaq Composite Index retreated 1.00 percent to close at 2,902.33.
In European news, the finance ministers for the 17 countries agreed to lend 30 billion euros ($36.88 billion) to Spain by the end of this month and also extended the country's deadline for meeting a 3 percent budget deficit target by one year to 2014. Spanish and Italian bond yields fell below 7 percent and 6 percent, respectively.
Meanwhile, U.K. manufacturing output rose unexpectedly in May, according to a report from the Office for National Statistics. U.K. factory output increased 1.2 percent, while economists expected a drop of 0.1 percent.
Hot Stocks Of The Day: AA, AMD, RIMM, AMAT, CMI, JCP, HELE, SHLM, WDFC
In corporate news, Alcoa Inc. (NYSE:AA) retreated 4.11 percent after the world's biggest aluminum maker reported lower quarterly revenue amid drop in realized aluminum prices.
Advanced Micro Devices Inc. (NYSE:AMD) tumbled 11.21 percent after the California-based chipmaker forecast an unexpected decline revenue for the second quarter, blaming slow growth in China and Europe.
Research In Motion Ltd. (NASDAQ:RIMM) shed 4.95 percent. The embattled Blackberry maker held its annual meeting to discuss its future strategy amid its slumping share performance.
Applied Materials Inc. (NASDAQ:AMAT) dropped 2.72 percent after the maker of semiconductor equipment revised lower its full year earnings and sales forecast, citing weaker than expected near-term demand, primarily among foundry customers.
Cummins Inc. (NYSE:CMI) slumped 8.94 percent after the diesel engine maker reduced its revenue outlook for 2012 and guided second quarter below Wall Street view, blaming weak demand in "some markets".
J.C. Penney Company Inc. (NYSE:JCP) lost 5.76 percent. Poor messaging and slowing of consumer environment will hit the Plano, Texas-based operator of department stores' second-quarter, an analyst said.
Helen of Troy Ltd. (NASDAQ:HELE) dived off 13.49 percent after the Hamilton, Bermuda-based consumer products company reduced its earnings forecast for fiscal 2013 after reporting lower quarterly profit that trailed Wall Street projections as higher costs offset growth in sales.
A. Schulman Inc. (NASDAQ:SHLM) jumped 8.70 percent after the resins company issued an upbeat earnings forecast for 2012.
WD-40 Co. (NASDAQ:WDFC) dropped 4.11 percent following the consumer products company's quarterly earnings and outlook for 2012. Third-quarter earnings per share increased to 57 cents from 47 cents, yet trailed expectations of 61 cents.
European markets closed in green, with Germany's DAX adding 0.79 percent to close at 6,438.33. France's CAC40 gained 0.59 percent to finish at 3,175.41. U.K.'s FTSE 100 rose 0.65 percent to end at 5,664.07.
Among Asian markets, China's Shanghai Stock Exchange Composite Index dipped 0.27 percent to close at 2,164.89. Japan's Nikkei 225 fell 0.44 percent to end at 8,857.73. Hong Kong's Hang Seng Index shed 0.16 percent to end at 19,396.36. India's BSE Sensex finished at 17,618.35, up 1.30 percent.
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Crude oil futures lost 2.51 percent to $83.830 per barrel and natural gas futures lost 4.82 percent to $2.744 per million metric British thermal units. Gold futures fell 1.43 percent to $1,566.40 per ounce and silver futures shed 2.44 percent to $26.775 per ounce.
In the currency market, the euro dropped 0.47 percent against the U.S. dollar to 1.2255. The British pound edged 0.04 percent lower against the greenback to 1.5521, and the dollar slipped 0.20 percent against the Japanese yen to 79.4000.