Belfast Telegraph

Dow Jones down due to woes for retailers and car companies

US stocks took their biggest loss in almost a month on Tuesday as investors worried about the health of the economy and sold shares in retailers and car companies.

Travel companies fell after cruise line operator Royal Caribbean cut its projections for the year and carmakers and suppliers fell after companies reported lower US sales for the month of July.

Banks finished lower as investors worried about the health of the sector in Europe.

While stocks set all-time records as recently as July 22, they have been trading in a very narrow range for the last few weeks.

Since stocks are not making big gains, investors are sensitive to signs of trouble for the US economy, like weaker sales of cars or last week's disappointing GDP report.

"The market had just rallied and now it's sort of paused," said Jim Paulsen, the chief investment strategist for Wells Capital Management.

The Dow Jones industrial average fell 90.74 points, or 0.5%, to 18,313.77 while the Standard & Poor's 500 index lost 13.81 points, or 0.6%, to 2,157.03.

The Nasdaq composite slid 46.46 points, or 0.9%, to 5,137.73.

The Dow has fallen for seven days in a row and Tuesday was the worst day for US stocks since July 5.

Car companies reported lower US sales in July as a heatwave kept buyers at home.

General Motors (GM) said its sales fell two per cent and Ford said sales fell three per cent.

GM stock shed 1.37 US dollars (£1.02), or 4.4%, to 29.93 dollars (£22.40) and Ford lost 54 cents (40p), or 4.3%, to 11.94 dollars (£8.93).

Car retailers CarMax and AutoNation and supplier BorgWarner all fell.

Cruise line operator Royal Caribbean cut its forecasts for the year as the strong dollar continues to hurt its results.

It left Royal Caribbean's stock down 4.51 dollars (£3.37), or 6.3%, to 67.35 dollars (£50.42).

Citigroup retreated 43 cents (32p), or one per cent, to 42.99 dollars (£32.18) and Morgan Stanley fell 50 cents (37p), or 1.8%, to 28 dollars (£20.96).

Bank stocks in Europe tumbled for the second day in a row and the losses extended to banks that were effectively given a clean bill of health by the European Banking Authority in last Friday's stress tests.

Oil prices continued to drop, extending a slide that has lasted more than two weeks.

Benchmark US crude fell 55 cents (41p), or 1.4%, to 39.51 dollars (£29.58) in New York.

US crude had not closed under 40 dollars (£29.96) a barrel since April 8.

Brent crude, which is used to price international oils, sank 34 cents (24p) to 41.80 dollars (£31.29) a barrel in London.

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