Slide worsens across the US stock markets

THE SELL-OFF in US stocks accelerated yesterday, as the Dow and S&P 500 dropped for a fifth day, with the pullback coming on the cusp of earnings season.

The Dow Jones industrial average lost 213.66 points, or 1.65 per cent, to 12,715.93 at the close. The Standard & Poor’s 500 Index dropped 23.61 points, or 1.71 per cent, to 1,358.59. The Nasdaq Composite Index tumbled 55.86 points, or 1.83 per cent, to 2,991.22.

The slide marked the S&P 500’s worst day since 8 December. The declines were the largest losses this year in terms of both points and percentage drops for each of the three major US stock indexes.

All S&P 500 sectors ended solidly lower, with industrial and materials names suffering the biggest drops. About 80 per cent of shares listed on the New York Stock Exchange and the Nasdaq Stock Market ended lower.

The major US stock indexes each fell more than 1.5 per cent, pushing the S&P 500 below its 50-day moving average of 1,372.30, an area viewed as a significant support level that will make or break the current uptrend.

The Nasdaq also slid below its 50-day moving average and closed below 3,000 for the first time since 12 March.

Concerns about European debt have resurfaced and could be a catalyst for further declines as the yields on riskier Italian and Spanish debt climbed. US-listed shares of Banco Santander fell three per cent.

Dow component Alcoa was a rare bright spot, climbing 5.4 per cent in extended trading after the aluminum maker reported its quarterly results.

With five per cent of the S&P 500 components having already reported, profits are seen rising 3.1 per cent in the quarter, according to the Thomson Reuters Director’s Report.

Volume was higher than average, with about 8.18bn shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, above last year’s daily average of 7.84bn.