New York Report: Sharpest drop on the Dow for over a month

US STOCKS fell yesterday, giving the Dow and the S&P 500 their worst declines in more than a month, as small-cap shares extended their retreat and Wal-Mart results disappointed.

The Russell 2000 index of small-cap stocks lost 0.7 per cent, well off its session low where it hit correction territory, down more than 10 per cent from its early March record close of 1,208.65. It ended down 9.3 per cent from that high.

The Dow Jones industrial average fell 167.16 points or 1.01 per cent, to end at 16,446.81.

The S&P 500 lost 17.68 points or 0.94 per cent, to 1,870.85. The Nasdaq Composite dropped 31.33 points or 0.76 per cent, to 4,069.29.

With the Dow and the S&P 500 near record highs, the Russell 2000’s move raised concern about the strength of the broader market.

Yesterday marked the second day of losses the three major US stock indexes.

Wal-Mart Stores shares dropped by 2.4 per cent to $76.83, weighing on both the Dow and the S&P 500.

The world’s largest retailer forecast second-quarter profit below analysts’ estimates.

Wal-Mart reported its smallest growth in quarterly sales in nearly five years and a drop in first-quarter profit, saying that severe winter weather made it difficult for customers to visit its stores.

The CBOE volatility index rose 8.2 per cent. The spread between the spot Vix and the three-month Vix at one point tightened to its smallest since 15 April.

The S&P 500 briefly traded below technical support, its 50-day moving average, but ended above that level.