Market Snapshot August 14, 2009, 2:23PM EST

Stocks Slide on Growth Worries

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In company news Friday, Abercrombie & Fitch (ANF) posted a second-quarter loss of $0.30 per share, vs. earnings per share of $0.87 one year earlier, on a 30% same-store sales drop and a 23% total sales drop. The company noted that its second-quarter gross profit rate was 66.5%, 360 basis points lower than a year ago.

J.C. Penney (JCP) posted breakeven second-quarter results, vs. $0.52 EPS one year earlier, on 9.5% lower same-stores sales and 7.9% lower total sales. Wall Street was looking for a loss of $0.01.

BofA/Merrill reportedly upgraded its investment rating on shares of Citigroup (C) to buy.

In economic news Friday, U.S. consumer sentiment dipped to 63.2 in August, according to the preliminary reading from the University of Michigan survey, after dropping nearly 5 points in July to 66.0. The index was 63.0 a year ago. The current conditions index fell to 64.9 from 70.5 in July (71.0 a year ago). The 6-month ahead outlook index dipped to 62.1 from 63.2 (57.9 a year ago). The 1-year ahead inflation index slowed to a 2.8% pace from 2.9% (4.8% last August). The 5-year ahead inflation guage also slowed to 2.9% from 3.0% (3.2% a year ago).

U.S. industrial production rose 0.5% in July, after a 0.4% decline in June, the first increase in nine months. May's 1.2% decline was revised up to -1.1%. That boosted capacity utilization to 68.5% compared to a revised 68.1% in June (was 68.0%). Manufacturing production rebounded 1.0% off of a 0.6% decline in June, with the motor vehicles and parts component surging 20.1%. Utility production declined 2.4% from a revised 0.9% gain in June (was 0.8%). Mining rose 0.8% after hefty declines all year.

The U.S. consumer price index was unchanged in July, with the core rate inching up 0.1%, compared to June's prints of 0.7% and 0.2%, respectively. Energy prices dipped 0.4% following a 7.4% surge in June, with gasoline down 0.8%. Housing costs declined 0.2% after a flat reading previously. The homeowners equivalent rent measure was unchanged. Food and beverage prices slipped 0.2%. Transportation costs rose 0.2%, with vehicle prices up 0.3%. Apparel prices rose 0.6%. Medical care prices edged up 0.2%. Tobacco prices rose 2.2%.

The European Union's statistics office Eurostat reported consumer prices in the 16 countries using the euro fell 0.7% in July for a 0.7% year-on-year drop -- deeper than the 0.6% fall initially estimated. It is the second consecutive month of prices declining in annual terms after June's 0.1% fall. The European Central Bank wants to keep inflation below, but close to 2%. It has made clear it did not want inflation to slow too much, but has also said there was only a very small risk of deflation, which it defines as prolonged price falls accompanied by expectations of more price declines.

Separately, Spain's gross domestic product dropped 1% quarter-on-quarter, slightly more than a Bank of Spain forecast of 0.9%. The GDP contracted 4.1% year-on-year, the sharpest fall since comparative data began in 1977.