NEW YORK REPORT
US STOCKS fell yesterday as signs of weakness in housing and investors’ worries that authorities might be curbing stimulus efforts too soon sparked caution.
World central banks said they would scale back infusions of US dollars into their banking systems, fueling unease triggered a day earlier when stocks sold off following the US Federal Reserve’s decision to slow purchases of mortgage debt.
That program has been one of the key pillars of the Fed’s efforts to support mortgage lending.
Thursday’s losses drove the benchmark S&P 500, which has rallied nearly 60 per cent in six months from 12-year lows, to its worst two-day drop in three weeks as investors pummeled stocks across the board.
All 10 S&P 500 sectors fell, with materials, energy, financials and industrials faring the worst.
“The housing number today threw some gasoline on the fire,” said John Kosar, market technician and president of Asbury Research.
“It’s not only that the recovery is fragile, but the other important story is just how far the market has come, so fast.”
The Dow Jones industrial average dropped 41.11 points, or 0.42 per cent, to 9,707.44. The Standard & Poor’s 500 Index fell 10.09 points, or 0.95 per cent, to 1,050.78. The Nasdaq Composite Index slid 23.81 points, or 1.12 per cent, to 2,107.61.