Dow Falls for 4th Day as Traders Watch Fed
Stocks ended near session lows Thursday, with all key S&P sectors finishing in the red, amid fears over the weak global economy and as optimism over further stimulus the Federal Reserve diminished.
The Dow Jones Industrial Average fell for the fourth-consecutive session, tumbling 115.30 points, or 0.88 percent, to close at 13,057.46, led by H-P .
The S&P 500 dropped 11.41 points, or 0.81 percent, to end at 1,402.08. The Nasdaq erased 20.27 points, or 0.66 percent, to finish at 3,053.40.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished near 16.
All 10 S&P sectors were in negative territory, led by energy and utilities.
Wall Street initially breathed a sigh of relief Wednesday after the latest minutes from the FOMC minutes showed "many" members said additional accommodation is likely warranted unless the economy improves substantially.
But St. Louis Fed President James Bullard threw cold water on expectations for further Fed easing, saying current economic conditions are not weak enough and called the latest meeting minutes "stale," on CNBC.
“The list of options that are actively being discussed probably suggest that the Fed is seeing that QE itself has not been necessarily the solution and perhaps they need to move in a different direction or combination,” said Quincy Krosby, market strategist at Prudential Financial. “At the same time, there’s been some profit taking as investors wait for the next catalyst.”
Oil prices turned sharply lowerin midday trading, tumbling more than 1 percent, as traders took profits on the heels of the recent rally. In addition, the drop accelerated once price fell below the 200-day moving average at $96.74 a barrel, according to John Kilduff of Again Capital.
Some weak global reports further dampened sentiment. China’s factory output dropped to a nine-month low, confirming fears of an entrenched slowdown for the world’s second-largest economy. (Read More: The Worst Is Yet to Come for China's Economy)
And in Europe, euro zone countries were on track for its second recessionin three years and is even spreading through Germany, the region's largest and strongest economy. And Germany's private sector shrank for the fourth-straight monthin August. (Read More: Euro Zone Data Could Force Faster ECB Action)
Meanwhile, Spain is negotiating with the euro zone over conditions for international aid to bring down its borrowing coststhough the country has not made a final decision to request a bailout, according to sources.
Facebook edged higher after the company announced a new iPhone and ipad app. The company said the new app is twice as fast as the old version and devotes more screen space to the news feed. Separately, FTC gave the green lightto the social-networking giant's $1-billion acquisition of Instagram. Facebook shares have been plagued since its IPO in May, plunging nearly 50 percent.
Among earnings, Hewlett-Packard tumbled after the tech giant missed quarterly revenue expectations and cut its full-year earnings outlook. In addition, at least seven brokerages slashed their price targets on the company.
Big Lots plunged more than 20 percent to lead the S&P 500 laggards after the retailer posted lower-than-expected earnings and slashed its full-year adjusted profit forecast. Canaccord Genuity cut its price target on the firm to $41 from $52.
Salesforce.com is slated to post earnings after the closing bell.
Baidu slumped after the Chinese Internet company was downgraded by Deutsche Bank to "hold" from "buy."
General Growth Properties surged after hedge fund firm Pershing Square Capital Management called for the real estate investment trust to consider putting itself up for sale.
On the economic front, jobless claims gained unexpectedly to the highest level in five weeks, according to the Labor Department.
New home sales gained 3.6 percent in July, but prices declined, according to the Commerce Department. (Read More: Housing Is Back—Even If It Doesn't Feel That Way)
Meanwhile, manufacturing ticked higher in August but hiring in the sector slowed and weak overseas demand for American goods kept the pace of overall growth subdued, according to financial information firm Market and its U.S. "flash" manufacturing PMI.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
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