Stocks tumbled Thursday after a series of disappointing economic reports and despite an uptick in mergers and acquisitions activity. The day's downdraft wiped out the week's gains for the Dow and the S&P 500.
The Dow Jones Industrial Averageended down 144.3 points, or 1.4 percent, to 10,271.21 Thursday after falling sharply most of the day, accelerated by a weak report on manufacturing out of the Mid-Atlantic region. Volume was light.
Intel , General Electric and Alcoa led the blue-chip index lower.
The S&P 500fell 18.53 points, or 1.7 percent, to 1,075.63 and the Nasdaqfell 36.8 points, or 1.7 percent, to 2,178.95, breaking a three-day winning streak for both indexes. The CBOE Volatility Index, widely considered the best gauge of fear in the market, was up more than 7 percent, at above 26.
The key S&P 500 sectors were all lower, with financials, materials and industrials faring the worst.
Trading activity lately has been highly sensitive to economic news, and today is no exception, said Randy Frederick, director of trading and derivatives for Charles Schwab.
As a result, intraday volatility is very high, making it difficult for investors who can't watch the markets every minute, Frederick said.
"That’s why we see volumes down, and why we see such interest in fixed-income products," he said, adding that he doesn't see an end to this trend. "I absolutely think this volatility on an intraday basis will continue until we see leveling off in these economic indicators, which we haven't seen yet."
M&A activity was brisk this week, with the total volume of global deals reaching $84.81 billion, the highest level for the year, according to Dealogic. The deal activity was having an impact on the market, although it wasn't pushing prices higher across-the-board as some participants had hoped.
Intel shares were down more than 3 percent after the tech giant announced it will acquire software and computer security company McAfee. McAfee shares soared along with other software and computer security firms, including rival Symantec .
First Niagara Financial fell more than 5 percent following news that the bank plans to acquire NewAlliance Bancshares for $1.5 billion.
And BHP Billiton is working on getting regulators to approveits $39 billion hostile bid for Potash before the company approaches shareholders, according to Reuters. Potash's board already rejected the offer.