Wall St has worst day for 3 months
THE Dow and S&P 500 suffered their worst one-day fall in three months yesterday after economic reports fueled fears about the recovery’s strength.
The pullback occurred a day after stocks ended the third quarter with strong gains, with the Dow and S&P each up 15 per cent from the previous quarter.
Cyclical stocks, which are sensitive to the economy’s cycles, were among the worst performers, including technology and bank shares.
The KWB bank index dropped 5 per cent while an index of semiconductors fell 4.8 per cent. Airlines also fell sharply, with an airline index down 8.3 per cent.
The Institute for Supply Management’s index of national factory activity declined in September from August’s reading, and although the latest reading still indicated growth, it was sharply below economists’ forecast.
Data on jobless claims also was worse than expected.
“There was disappointment from the ISM this morning. It missed expectations,” said Mike O’Rourke, chief market strategist at BTIG.
“With the last quarter ending, a lot of people were holding stuff up for window dressing and now you’re seeing profit-taking,” he added. “We’ve had a tremendous run up.”
Analysts said the news added to anxiety ahead of today’s September jobs report from the government, the month’s biggest data release.
The Dow Jones industrial average tumbled 203.00 points, or 2.09 per cent, to end at 9,509.28. The Standard & Poor’s 500 Index. SPX slid 27.23 points, or 2.58 per cent, to 1,029.85. The Nasdaq Composite Index lost 64.94 points, or 3.06 per cent, to 2,057.48.
It was the third straight day of declines for stocks and the Nasdaq’s worst fall since 22 June, just before the market suffered a modest pullback.
All 30 Dow components finished in the red, with the Dow’s biggest decliners including JPMorgan Chase, down 5.6 per cent at $41.37, and Boeing, down 3.8 per cent at $52.11.
Bank of America shares slipped 4.2 per cent to $16.21 after chief executive Ken Lewis said he was retiring after months of being hounded.