NEW YORK (CNNMoney) -- U.S. stocks fell sharply Tuesday, with the Dow suffering a triple-digit decline for a third session, on a combination of gloomy factors.
However, the market recovered some ground just before the closing bell after a report in the Wall Street Journal suggested the Federal Reserve may be moving toward more simulative monetary policies.
The outlook for U.S. economic growth has dimmed amid a recent spate of disappointing reports, including weak manufacturing data from the Richmond Federal Reserve Tuesday.
While investors have found some solace in corporate earnings and sales data, the latest quarterly results from Corporate America were uninspiring.
As if that were not enough, Europe continues to be a major source of concern, with renewed worries about Greece at a time when Spain and Italy are running into trouble.
The Dow Jones industrial average (INDU) dropped 104 points, or 0.8%, to end at 12,617.
The S&P 500 (SPX) lost 12 points, or 0.9%, to 1,338. The Nasdaq (COMP) fell 27 points, or 0.9%, to 2,863.
Europe's escalating debt crisis was also a catalyst behind Tuesday's sell-off.
Spain successfully auctioned €3 billion of 3-month and 6-month government bills, but investors demanded higher interest rates than last month amid ongoing fears that Spain could require a full-blown bailout.
"It's still unclear how severe Spain's funding problem is right now, and where there's uncertainty, investors become defensive," said Michael Sheldon, chief market strategist at RDM Financial Group.
The yield on the 10-year Spanish bond hit a fresh euro-era record high of 7.636%.
And then there's Greece. The so-called troika of representatives from the European Union, International Monetary Fund and European Central Bank are in Athens to determine whether the nation qualifies for its next installment of bailout money.
Meanwhile, European manufacturing activity remains sluggish. Activity continued to contract across the eurozone in July, while Germany's PMI fell to a three-year low.
Despite the gloom out of Europe and the United States, investors were slightly heartened by a pick-up in Chinese manufacturing activity. Early Tuesday, HSBC said its China Manufacturing Purchasing Managers' Index came in at 49.5 for July. While any reading below 50 indicates contraction, it is the highest number reported since February and shows significant improvement.
The dollar rose against the euro and British pound, but lost ground versus the Japanese yen.
Oil for September delivery rose 60 cents to $88.74 a barrel.
Gold futures for August delivery fell $1.20 to settle at $1,576.20 an ounce.
No comments:
Post a Comment