Stocks Snap 3-Day Rally, Dow Ends Near 11,000
Stocks accelerated their losses in the final hour trading to finish near session lows Wednesday amid ongoing concerns over the global economy and as investors cautiously waited for further developments in the euro zone.
The Dow Jones Industrial Average tumbled 179.79 points, or 1.61 percent, to close at 11,010.90, erasing a 126-point gain earlier in the session.
All 30 Dow components ended lower, led by Bank of America , Alcoa and 3M .
The S&P 500 dropped 24.32 points, or 2.07 percent, to end at 1,151.06. The Nasdaq skid 55.25 points, or 2.17 percent, to finish at 2,491.58.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, jumped above 41.
All key S&P sectors ended in negative territory, led by materials and energy.
“Once again, this market is headline driven,” said Joe Saluzzi, co-manager of trading at Themis Trading. “Germany’s tired of being the banker for Europe—even if they help Greece out, the markets get tired of bailouts…and there’s a question of sustainability."
Finland voted to approve changes to the EFSFand Germany is scheduled to vote on Thursday. The expanded EFSF will allow purchase of sovereign debt and aid European banks. So far, a total of eight out of 17-euro zone members have approved the EFSF expansion.
Meanwhile, short-sale bans in France and Italy have been extended until Nov. 11, while the curb in Spain will remain until market conditions change, according to the European Securities and Markets Authority.
“The short-selling ban doesn’t help matters—nobody finds that particularly confidence inspiring,” said Dan Greenhaus of BTIG.
The troika (EU, ECB and IMF) is scheduled to resume its mission to Athens on Thursday, according to a European Commission spokesman, adding that euro zone finance ministers will hold an additional meeting in October to further discuss Greek finances and aid to Athens.
Materials dragged on the S&P, falling almost 5 percent after rallying in the previous few sessions.
Gold prices slumped near $1,620 an ounceas investors booked profits after the precious metal's rebound rally in the previous session. Copper prices plunged more than 5 percent.
Several commodity stocks hit new lows. Coal stocks such as Alpha Natural Resource and Peabody Energy , steel stocks like AK Steel , and aluminum giant Alcoa .
Jefferies raised its fourth-quarter estimates on Apple from $7.06 to $7.11, saying the firm's recent iPad cuts will be more than offset by the strength of the latest iPhone. The brokerage also upped its fiscal 2011 and 2012 earnings on the tech giant. Apple may unveil its latest iPhone next Tuesday.
Meanwhile, Amazon launched a new color-screen tablet computercalled "Fire" for $199, hoping to compete with the popular iPad. The Fire has a seven-inch screen, Wi-Fi, but no camera or 3G wireless connection. The firm also unveiled an upgraded Kindle for $99, dubbed Kindle Touch. Barnes & Noble , maker of the Nook e-reader, slumped.
Cisco slipped even after FBN Securities started coverage of the tech bellwether with an "outperform" rating.
Goldman Sachs cut its price target on a handful of banks including Bank of America , Citigroup , JPMorgan and KeyCorp .
Meanwhile, the brokerage raised its price target on PNC Financial , USBancorp and Wells Fargo .
AmEx gained after the credit-card distributor said it plans to work with Tencent, China's largest Internet company, to provide cross-border online payments.
Among earnings, Accenture edged higher after the tech outsourcing company posted stronger-than-expected quarterly earnings and forecast a robust 2012.
Jabil Circuit jumped to lead the S&P 500 gainers after the contract manufacturer beat earnings estimates. In addition, Goldman Sachs and Citigroup raised their price targets on the firm.
Meanwhile, Darden Restaurants slumped after the parent company of Olive Garden posted a drop in earnings, partially due to hurricane Irene, but reaffirmed its full-year earnings outlook. Rival chain restaurants Cheesecake Factory and Brinker International also sagged.
Two Linux software groups have joined forces to develop a new operating system for cellphones and other devices in collaboration with Intel and Samsung Electronics.
The government auctioned $35 billion in five-year notes that had a high yield of 1.015 percent and bid-to-cover of 3.04.
On the economic front, durable goods orders slipped slightly in August amid weak demand for autos, according to the Commerce Department.
“Soon, people will start looking at our own economy and will start to focus on our own mess again,” said Saluzzi.
Weekly mortgage applications gained last week, showing a rise in demand for home loan refinancing as mortgage rates declined, according to the Mortgage Bankers Association.
—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC—
On Tap This Week:
THURSDAY: GDP, jobless claims, Fed's Rosengren speaks, corporate profits, pending home sales, 7-yr note auction, farm prices; Earnings from Micron
FRIDAY: Personal income & outlays, Chicago PMI, consumer sentiment, Fed's Bullard speaks
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