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Traders work on the floor of the New York Stock Exchange June
29, 2010. Investors fled the U.S. stock market on Tuesday and the S&P 500
tumbled to its lowest level in eight months in a sell-off triggered by a wave of
increasing alarm over the global economic outlook.
U.S. stocks tumbled on Tuesday, with both the S&P and Nasdaq settling at
their lowest levels in 2010, as downbeat economic news made investors worry that
the global economic rebound was weakening.
The Dow Jones industrial average ended 268.22 points lower to 9, 908.92,
after once tumbling more than 300 points during the session.
The Standard &Poor's 500 index plummeted 33.33 points, or 3.10 percent,
to 1,041.24 and the Nasdaq slumped 85.47 points, or 3.85 percent, to 2,135.18.
Both indexes were at their lowest closing levels for the year.
Asian and European markets were broadly down, with the Shanghai Composite
falling more than 4 percent to the lowest level in 14 months, after the
Conference Board, a New York-based research group, revised its leading economic
index for China to show the smallest gain in five months in April.
Industrial companies and natural-resource firms were among the hardest hit as
investors worried a slowdown in China, one of the main drivers in global
economic recovery, will result in the decrease in demand.
Europe was also a major issue. With labor strikes continue in Greece and
Spain, more and more people are predicting that neither of the countries will be
successful in their austerity measures or cutting their debt enough without some
additional aid, which push Credit default swaps spreads in Greece and Spain to
their new highs.
Adding to the pressures, U.S. consumer confidence fell sharply in June amid
the gloomy labor market. According to another report from the Conference Board,
its Consumer Confidence Index dropped to 52.9 in June from 62.7 in May, while
economists were expecting the reading to slip to 62.
A separate report showed U.S. home prices rose in April, but failed to
provide support for the market. The S&P/Case-Shiller home price index, which
measures home prices in 20 large metropolitan areas, rose 0.8 percent, boosted
by the expiration of the federal first-time home-buyer tax credit.
Investors fled to safety assets, sending the dollar, gold and Treasuries
higher. Yields on two-year Treasury notes fell to the lowest on record on
Tuesday. |
