US stock indexes fall as afternoon slide accelerates
Banks led a broad slide in US stocks on Wednesday that more than wiped out gains from the day before.
After an early upward turn, the stock market veered into the red by mid-morning, the losses accelerating as the day wore on. Basic materials companies, industrials, utilities and energy stocks were among the biggest decliners.
Trading was light ahead of the New Year's Day holiday. Two stocks fell for every one that rose on the New York Stock Exchange.
"Volume is pretty weak, so there's no aggressive selling taking place," said Bob Doll, chief equity strategist at Nuveen Asset Management. "It's more sellers locking in some better gains than they thought they were going to get this year. It's been a really good year, so letting a little go is just fine."
The Dow Jones industrial average fell 111.36 points, or 0.6%, to 19,833.68. The Standard & Poor's 500 index lost 18.96 points, or 0.8%, to 2,249.92. The Nasdaq composite, which set a record high close the day before, slid 48.89 points, or 0.9%, to 5,438.56.
The three major indexes are on pace for a solid gain this year. The Dow is up 13.8%, the S&P 500 is on track for a 10% gain, and the Nasdaq is heading for an 8.6% gain. Small-company stocks are up even more, with the Russell 2000 up 19.8% so far this year.
In a week featuring a dearth of major economic or company data, investors got some insight into the US housing market.
A report from the National Association of Realtors found that fewer Americans signed contracts to buy homes in November. The NAR said its seasonally adjusted pending home sales index fell 2.5% to 107.3%, the lowest reading since the start of this year.
The slowdown marks a reversal for the housing market, as sales growth has been solid for the past year. Homebuilder stocks closed mostly lower, with William Lyon Homes losing the most, falling 64 cents, or 3.2%, to 19.33 dollars.
Nvidia was the biggest decliner in the S&P 500 index, sliding 6.9% after short seller Citron Research said it expects the chipmaker's shares, which have tripled in value this year, to fall substantially. The stock lost 8.07 dollars to 109.25 dollars.
Shares in oil and natural gas drilling companies also declined.
Chesapeake Energy lost 36 cents, or 4.7%, to 7.23 dollars, Murphy Oil shed 78 cents, or 2.4%, to 32.03 dollars, and Helmerich & Payne fell 1.57 dollars, or 2%, to 78.39 dollars.
Fred's dropped 4.8% on a published report indicating that the regional drugstore chain has adopted a "poison pill" to discourage an activist investor from interfering with the company's plan to buy 865 Rite Aid stores. Rite Aid has to sell the stores to appease antitrust regulators and close its 9.4 billion dollar buyout deal with Walgreens Boots Alliance. Shares in Fred's fell 95 cents to 18.68 dollars.
Qualcomm slipped 2.2% after antitrust regulators in South Korea fined the company 865 million dollars, claiming the chipmaker engaged in unfair sales practices, including refusing to let competitors license patents that are essential for chipmaking. The stock lost 1.50 dollars to 65.75 dollars.
Coach notched the biggest gain in the S&P 500 index, adding 70 cents, or 2%, to 35.14 dollars.
Markets overseas were mostly subdued.
In Europe, Germany's DAX and France's CAC 40 each ended essentially flat, and Britain's FTSE 100 posted a record-high close of 7,106.08, a gain of 0.5%.
In Asia, Japan's Nikkei 225 was flat, Hong Kong's Hang Seng index gained 0.8%, and South Korea's Kospi dropped 0.9%, while Australia's S&P ASX 200 gained 1%.
Benchmark US crude rose 16 cents to close at 54.06 dollars a barrel in New York. It rose 88 cents on Tuesday. Brent crude, used to price international oils, climbed 13 cents to close at 56.22 dollars a barrel in London. It gained 93 cents the day before.
In other energy trading, wholesale petrol added 2 cents to 1.67 dollars a gallon and heating oil held steady at 1.70 dollars a gallon. Natural gas futures rose 17 cents, or 4.5%, to 3.93 dollars per 1,000 cubic feet.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.51% from 2.56% late on Tuesday.
In currency trading, the dollar fell to 117.19 yen, down from 117.45 on Tuesday. The euro fell to 1.0407 dollars from 1.0458 dollars.
Among metals, the price of gold rose 2.10 dollars to 1,140.90 dollars an ounce, silver added 5 cents to 16.04 dollars an ounce, and copper fell 2 cents to 2.50 dollars a pound.