Several weak economic reports sent the stock market plunging on Wednesday to its lowest level in a month.
Mining, banking and chemical companies, and other businesses with fortunes tied closely to prospects for growth, led the market lower. That is a sign that investors are becoming less confident in the economy.
The troubling data included weak hiring at private companies, a plunge in mortgage applications and sluggish orders to American factories.
The Dow Jones industrial average fell 216.95 points and finished at 14,960.59, a drop of 1.4 percent. The close was the first below 15,000 since May 6 and the decline was the largest in seven weeks.
Intel fell the most in the Dow, dropping 66 cents, or 2.6 percent, to $24.70.
The Standard Poor’s 500 index ended down 22.48 points, or 1.4 percent, at 1,608.90. The index is 3 percent below its record close of 1,669 reached May 21. It is still up 12.8 percent this year.
The Nasdaq composite index dropped 43.78 points, or 1.3 percent, to 3,401.48. The index closed at its lowest level in a month.
Stocks started lower and declined steadily throughout the day. Some investors said that because stocks rose every month this year and climbed to record levels this spring, a significant pullback was overdue.
“The rally is tired, and people are taking some profits,” said Brad Reynolds, at the investment adviser LJPR.
Investors also were unnerved by an 11.5 percent drop in mortgage applications last week. The decrease was a disappointment because the rebound in housing had been a major factor supporting the stock market’s record-breaking rally this year.
Housing stocks slumped in response. D.R. Horton dropped 27 cents, or 1.2 percent, to $22.65. Beazer Homes fell 60 cents to $18.78, a decline of 3.1 percent.
Applications declined as mortgage rates rose to the highest point since April 2012. The increase was driven by higher yields in the bond market.
The yield on the 10-year Treasury note climbed as high as 2.2 percent last week, the highest in more than two years. On Wednesday, the note rose 17/32, to 96 31/32, and yield fell to 2.09 percent, from 2.15 percent late Tuesday.
News was disappointing on hiring, another one of the major supports for the market rally this year.
A measure of employment in the service sector fell in May to the lowest level since last July, and the payroll provider ADP reported the second straight month of weak gains in jobs.
The stock market’s recent bout of volatility began May 22 as traders studied comments from the Federal Reserve chairman, Ben S. Bernanke, and minutes from the last meeting of the Fed’s policy committee for clues about when the bank may slow its stimulus program.
Article source: http://www.nytimes.com/2013/06/06/business/daily-stock-market-activity.html?partner=rss&emc=rss
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