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8A Daily News – Friday, August 16, 2013 Warnings of slower sales drive US stocks lower NEW YORK (AP) — Grim sales forecasts from two major companies and concern that the Federal Reserve will soon start withdrawing its support for the economy pummeled the stock market Thursday. The Dow Jones industrial average slumped 225 points, its worst day in nearly two months. Investors also dumped bonds, driving the yield on the 10-year Treasury note to its highest level in more than two years. Before the start of trading, Wal-Mart cut its estimates for annual revenue and profit, warning that cautious shoppers are spending less. The news followed a disappointing revenue forecast from Cisco Systems late Wednesday. In a twist, more signs of resilience in the U.S. economy weighed on the stock market. Reports on inflation and the job market appeared to raise the odds that the Fed would begin winding down its massive bond-buying program as early as next month. Many investors think that the Fed's effort has underpinned the stock market's record run. ''People are worried that this move up in interest rates will kill the recovery, and we won't Wall Street see the anticipated second-half improvement in growth and corporate earnings,'' said Alec Young, global equity strategist at S&P Capital IQ. The Standard & Poor's 500 index fell 24.07 points, or 1.4 percent, to 1,661.32. The selling swept across all 10 industry groups in the index. The Dow lost 225.47 points, or 1.5 percent, to 15,112.19. The Nasdaq composite index fell 63.16 points, or 1.7 percent, to 3,606.12. Some investors cautioned against reading too much into Thursday's drop. ''It seems like an overreaction today,'' said Randy Frederick, managing director of active trading and derivatives at the Schwab Center for Financial Research. Corporate earnings are solid and the economy is improving, he noted. The stock market hit an all- time high two weeks ago. The Dow is still up 15 percent in 2013; the S&P 500 up 16 percent. The government reported that the number of Americans applying for unemployment bene- fits dropped to 320,000 last week. That's the lowest level since October 2007, two months before the start of the Great Recession. A slowly improving economy should eventually lead to higher spending and more sales for big companies. But that's down the road. Right now, investors are more focused on the Fed's next move, said Natalie Trunow, the chief investment officer at Calvert Investments. ''There's this counterintuitive reaction to economic news,'' Trunow said. ''Positive data comes out and markets aren't excited about it. They say, 'Uh-oh, the stimulus will be removed.' " Thursday's corporate news was mostly negative. Wal-Mart fell $1.99, or 3 percent, to $74.41 after the world's largest retailer cut its profit and revenue forecasts for 2013. It also reported second-quarter results that missed Wall Street's estimates. Cisco Systems announced plans to cut 5 percent of its workforce, roughly 4,000 employees, as sales slow. CEO John Chambers called the global economy ''challenging and inconsistent.'' Cisco plunged $1.89, or 7 percent, to $24.48, the biggest drop of the 30 big companies in the Dow. Cisco's announcement led to selling in other technology stocks because the company is widely regarded as a bellwether for the industry. Cisco sells a wide range of products to corporations and governments and its fiscal quarters end a month later than most major technology companies. As a result, Cisco's performance gives investors a glimpse into current conditions. In the market for U.S. government bonds, the yield on the 10-year Treasury note jumped as high as 2.81 percent, the highest level since July 2011. By the end of the day, the yield had drifted back to 2.77 percent, compared with 2.71 percent on Wednesday. Higher long-term interest rates could cool housing sales because the 10-year U.S. government note acts as a benchmark for interest rates on mortgage loans. ''A sharp increase in long-term rates translates into a sharp increase in mortgage rates,'' Trunow said. ''That's bound to impact the housing market.'' New raccoon-like mammal species discovered species of mammal called the olinguito. The reddishbrown animal is about 14inches long with an equally long tail and weighs about 2 pounds. It belongs to a grouping of large creatures that include dogs, cats and bears. The critter leaps through the trees of mountainous forests of Ecuador and Colombia at night, according to a Smithsonian researcher who has spent the past decade tracking them. PHYSICIAN REFERRAL WASHINGTON (AP) — Imagine a mini-raccoon with a teddy bear face that is so cute it's hard to resist, let alone overlook. But somehow science did — until now. 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