WASHINGTON (dpa-AFX) - Following the sell-off seen in the previous session, stocks showed another substantial move to the downside during trading on Tuesday. With the continued decline, the Dow tumbled to its lowest closing level in nearly four months.
The major averages all finished the day sharply lower. The Dow plunged 879.44 points or 3.2 percent to 27,081.36, the Nasdaq plummeted 255.67 points or 2.8 percent to 8,965.61 and the S&P 500 slumped 97.68 points or 3 percent to 3,128.21.
Stocks initially moved to the upside as some traders went bargain hunting, picking up stocks at reduced levels on the heels of yesterday's steep drop.
The Dow suffered its biggest point and percentage drop in two years on Monday, as traders worried about the impact of the coronavirus outbreak that has spread far beyond China to Europe and the Middle East.
Buying interest waned shortly after the start of trading, however, as fears about the outbreak escalating into a pandemic continued to hang over the markets.
Adding to the worries, MasterCard (MA) and United Airlines (UAL) joined a growing list of companies that have warned about the potential financial impact of the outbreak.
Meanwhile, traders largely shrugged off a report from the Conference Board showing a slight improvement in U.S. consumer confidence in the month of February.
The Conference Board said its consumer confidence index inched up to 130.7 in February from a downwardly revised 130.4 in January. Economists had expected the index to tick up to 132.5 from the 131.6 originally reported for the previous month.
'Consumers' short-term expectations improved, and when coupled with solid employment growth, should be enough to continue to support spending and economic growth in the near term,' said Lynn Franco, Director of Economic Indicators at the Conference Board.
Sector News
Energy stocks extended the sell-off seen in the previous session amid a continued decrease by the price of crude oil. After plunging $1.95 to $51.43 a barrel in the previous session, crude for April tumbled $1.53 to $49.90 a barrel.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plummeted by 4.8 percent, while the NYSE Arca Natural Gas Index and the NYSE Arca Oil Index slumped by 4.2 percent and 4 percent, respectively.
Substantial weakness was also visible among banking stocks, as reflected by the 4.5 percent nosedive by the KBW Bank Index. The index ended the session at its lowest closing level in four months.
Chemical stocks also showed another significant move to the downside, dragging the S&P Chemical Sector Index down by 4.5 percent to a nearly five-month closing low.
Housing, transportation, and networking stocks also saw considerable weakness on the day, reflecting another broad based sell-off on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index plunged by 3.3 percent as trading resumed following a holiday on Monday, while Hong Kong's Hang Seng Index rose by 0.3 percent.
Meanwhile, the major European markets all moved sharply lower over the course of the session. The German DAX Index, the U.K.'s FTSE 100 Index and the French CAC 40 Index all tumbled by 1.9 percent.
In the bond market, treasuries extended the strong upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by fell by 4.7 basis points to 1.330 percent.
Looking ahead
Data on new home sales is scheduled to be released on Wednesday but is likely to be overshadowed by the latest developments regarding the coronavirus.
Copyright RTT News/dpa-AFX