Wall Street falls on weak home sales
US stocks tumbled in a broad sell-off yesterday, sending the benchmark S&P 500 lower for a fourth straight day, after weak data on new home sales heightened concerns about the pace of the economic recovery.
Financials, technology, materials and industrial sectors, which underpinned the market’s advance from March, bore the brunt of the slide as investors reassessed their bets.
The Nasdaq also logged its fourth straight daily drop. Yesterday’s sell-off marked the broader market’s worst day of losses in nearly a month.
The S&P 500 is now up 54.1 per cent from the 12-year closing low of 9 March. At last night’s close, it showed a drop of 5.04 per cent from its post-March closing peak reached a week ago on 19 October.
The Dow Jones industrial average dropped 119.48 points, or 1.21 per cent, to 9,762.69 – its third triple-digit drop in four days. The Standard & Poor’s 500 Index fell 20.78 points, or 1.95 per cent, to 1,042.63. The Nasdaq Composite Index slid 56.48 points, or 2.67 per cent, to 2,059.61.
During the session, both the S&P 500 and the Nasdaq broke below key technical levels as the sell-off accelerated. Both indexes closed below their 50-day moving average for the first time since July, a bearish technical signal.
Additionally, the S&P 500 wiped out its gains for October and is now on the verge of snapping a string of seven months of gains.
The CBOE Volatility Index, Wall Street’s favourite fear gauge, ended up 12.5 per cent, its biggest one-day percentage gain since August.
Among financials, JPMorgan shares fell 2.8 per cent to $42.68, American Express dropped 3.6 percent to $34.67, and the S&P financial index shed 3.2 per cent.
On the technology front, Apple slid 2.5 per cent to $192.40 made the iPod maker the Nasdaq’s top drag.
The Dow Jones US home construction index fell 5.5 per cent – its worst one-day percentage slide since May. The S&P materials index dropped 3.2 per cent.
Among shares of natural resource companies, aluminum company Alcoa tumbled nearly 7 per cent to $11.93, while heavy-duty maker Caterpillar, fell 4 per cent to $54.43.