Stocks tumbled on Thursday, with the Dow and S&P 500 posting their first monthly drop since January, as investors worried about Europe's economy, an Argentine default and a jump in U.S. labor costs prompted concerns about corporate margins. The Dow Jones Industrial Average closed unofficially 317 points, or 1.8 percent down, the S&P 500 dropped 39 points, or 2 percent, and the Nasdaq lost 93 points, also 2 percent. "It's a combination of the ECI (Employment Cost Index) coming in hot, as well as the Argentinian situation, which we do not think is a contagion situation, but the straw that broke the camel's back," said Jim Russell, senior equity strategist for US Bank Wealth management. Argentina's default came as international banks sought a deal that would let the country restart servicing its securities. Euro-zone inflation unexpectedly declined this month, highlighting the European Central Bank's worries that the region's economy is not healthy enough to support increased prices. The U.S. Labor Department also reported labor costs rose the most in more than five years in the second quarter, with the ECI climbing 0.7 percent, the biggest jump since the third quarter of 2008.
- Kate Gibson, CNBC.com
First published July 31 2014, 6:44 AM