Another series of attacks in London unnerved Wall Street on Thursday, 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. "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-stock index fell 8.16, or 0.66 percent, to 1227.04, and the Nasdaq composite index slipped fell 9.97, or 0.46 percent, to 2178.60. Both the S&P 500 and Nasdaq had set new four-year highs on Wednesday.
China's currency move sent bonds tumbling, and the dollar fell against most major currencies following China's decision, which traders felt would benefit Asian and European currencies over the dollar.
EBay rose $7.23, to $42.10, after announcing earnings that beat Wall Street expectations.
Coca-Cola rose 62 cents, to $43.95, after announcing a 9 percent increase in quarterly profit.
McDonald's fell 12 cents, to $30.78, after taking a tax hit from repatriating international income.
Merck fell 47 cents, to $31.38, on a 59 percent profit drop.
Qualcomm rose $2.92, to $39.01, after beating earnings forecasts.
New York Stock Exchange composite index fell 41.01, to 7412.40.
American Stock Exchange index fell 3.56, to 1536.06.
Russell 2000 index of smaller-company stocks fell 10.46, to 667.10.
NYSE: 2.14 billion shares, up from 2.06 billion on Wednesday. Decliners outnumbered advancers 13 to 6.
Nasdaq: 2.05 billion shares, up from 1.98 billion. Decliners outnumbered advancers 5 to 3.
Light, sweet crude oil for September delivery: $57.13, down 89 cents.
Gold for current delivery: $425.40 a troy ounce, up from $421.70 on Wednesday.