U.S. stocks tumbled the most in eight weeks, as Apple Inc. sank on snafus related to its new smartphone and signs of worsening conflict in Russia and the Middle East.
Apple plunged 3.4 percent to send technology stocks in the Standard & Poor’s 500 Index to the biggest decline since April. Biogen Idec Inc. and TripAdvisor Inc. lost at least 3.1 percent as investors sold some of the bull market’s biggest winners. Allegheny Technologies Inc. sank 4.8 percent as industrial metals slid. The Russell 2000 Index of small-cap stocks sank 1.4 percent, poised to close at a four-month low.
The S&P 500 fell 1.4 percent to 1,970.45 at 3:17 p.m. in New York, with all but 21 of the index’s components declining. The Dow Jones Industrial Average plunged 235.49 points, or 1.4 percent, to 16,974.57. The Nasdaq 100 Index slid 1.9 percent. All three gauges are having their worst performance since July 31. Trading in S&P 500 stocks was in line with the 30-day average.
“We could have a pull back of 5 percent anytime if you have a confluence of factors that impact investor psychology or geopolitical factors that seem to get out of control,” Marshall Front, chief investment officer at Chicago-based Front Barnett Associates LLC, said by phone. “Stocks are no longer undervalued. There are rumors the Russian parliament authorized confiscation of foreign investments, Apple is weighing on the tech sector, and the durable goods top line number was very weak.”
Data, Russia
Equities opened lower as data on U.S. equipment orders and weekly jobless claims bolstered the argument that the economy may be improving enough for the Federal Reserve to raise rates sooner than estimated. Stocks extended losses on a report that Russian lawmakers are drafting legislation that would allow the government to seize foreign assets in the country.
Today’s decline in the S&P 500 sent the benchmark gauge below its average price for the past 50 days for the first time since August. The index is down 1.7 percent in September, headed for its worst month since January.
Investors sold some of the market’s best performers, with the companies with the 10 biggest losses in the Nasdaq 100 Index at 12:38 p.m. having risen an average of 65 percent last year. An index compiled by Wells Fargo of companies with the biggest hedge fund ownership declined 1.5 percent. The small-cap Russell 2000 has plunged 7.9 percent from a high on July 3, while the Dow Jones Internet Composite Index has lost 5 percent since Sept. 8.
Weekly Drop
U.S. data today showed applications for unemployment benefits increased less than forecast last week, while orders for business equipment climbed more than forecast in August. Demand for all durable goods slumped a record 18.2 percent.
The S&P 500 climbed 0.8 percent yesterday, its biggest gain since Aug. 18, to rebound from a 1.4 percent slide over three days after closing Sept. 18 at an all-time high. The gauge has not had a four consecutive declines this year as it continued a bull market that nearly tripled its level since March 2009. It is down 2.1 percent this week.
“There’s a broad-based fear that things could turn negative -- the market has been short-term skittish,” Tom Sudyka, president of Lawson Kroeker Investment Management in Omaha, Nebraska, said in a phone interview. His firm oversees about $500 million. “Every time we get near or at a record, there’s always a pause to see if it’s a reasonable valuation.”
The S&P 500 trades at 17.8 times the reported earnings of its companies, near the highest level since 2010. The Nasdaq 100 has a price-earnings ratio of 23.6. It topped 24 this month for the first time since 2010.
Volatility Spike
The Chicago Board Options Exchange Volatility Index, the gauge known as the VIX, increased 20 percent to 15.98 today, the most since July. The index slid 11 percent yesterday after surging 24 percent over the prior three days.
Eight of the 10 main S&P 500 groups retreated at least 1 percent today, with technology shares sinking 2.1 percent to pace losses. Materials producers plunged 1.3 percent. No stock in the benchmark gauge climbed more than 1 percent.
Apple’s 3.4 percent slide was the biggest since Sept. 3. The company pulled a new mobile-software update after the program caused some people to lose cellular service yesterday. Scores of consumers also criticized the new 6 Plus iPhone and how it can bend.
Biogen Idec dropped 3.6 percent and Illumina Inc. slid 2.8 percent to pace declines in the technology-heavy Nasdaq 100. The two had rallied at least 90 percent in 2013.
Allegheny Technologies sank 4.8 percent for the biggest drop in the equities benchmark. The metals miner led losses among material producers as commodities declined after the dollar touched a four-year high.
source: Bloomberg
Apple plunged 3.4 percent to send technology stocks in the Standard & Poor’s 500 Index to the biggest decline since April. Biogen Idec Inc. and TripAdvisor Inc. lost at least 3.1 percent as investors sold some of the bull market’s biggest winners. Allegheny Technologies Inc. sank 4.8 percent as industrial metals slid. The Russell 2000 Index of small-cap stocks sank 1.4 percent, poised to close at a four-month low.
The S&P 500 fell 1.4 percent to 1,970.45 at 3:17 p.m. in New York, with all but 21 of the index’s components declining. The Dow Jones Industrial Average plunged 235.49 points, or 1.4 percent, to 16,974.57. The Nasdaq 100 Index slid 1.9 percent. All three gauges are having their worst performance since July 31. Trading in S&P 500 stocks was in line with the 30-day average.
“We could have a pull back of 5 percent anytime if you have a confluence of factors that impact investor psychology or geopolitical factors that seem to get out of control,” Marshall Front, chief investment officer at Chicago-based Front Barnett Associates LLC, said by phone. “Stocks are no longer undervalued. There are rumors the Russian parliament authorized confiscation of foreign investments, Apple is weighing on the tech sector, and the durable goods top line number was very weak.”
Data, Russia
Equities opened lower as data on U.S. equipment orders and weekly jobless claims bolstered the argument that the economy may be improving enough for the Federal Reserve to raise rates sooner than estimated. Stocks extended losses on a report that Russian lawmakers are drafting legislation that would allow the government to seize foreign assets in the country.
Today’s decline in the S&P 500 sent the benchmark gauge below its average price for the past 50 days for the first time since August. The index is down 1.7 percent in September, headed for its worst month since January.
Investors sold some of the market’s best performers, with the companies with the 10 biggest losses in the Nasdaq 100 Index at 12:38 p.m. having risen an average of 65 percent last year. An index compiled by Wells Fargo of companies with the biggest hedge fund ownership declined 1.5 percent. The small-cap Russell 2000 has plunged 7.9 percent from a high on July 3, while the Dow Jones Internet Composite Index has lost 5 percent since Sept. 8.
Weekly Drop
U.S. data today showed applications for unemployment benefits increased less than forecast last week, while orders for business equipment climbed more than forecast in August. Demand for all durable goods slumped a record 18.2 percent.
The S&P 500 climbed 0.8 percent yesterday, its biggest gain since Aug. 18, to rebound from a 1.4 percent slide over three days after closing Sept. 18 at an all-time high. The gauge has not had a four consecutive declines this year as it continued a bull market that nearly tripled its level since March 2009. It is down 2.1 percent this week.
“There’s a broad-based fear that things could turn negative -- the market has been short-term skittish,” Tom Sudyka, president of Lawson Kroeker Investment Management in Omaha, Nebraska, said in a phone interview. His firm oversees about $500 million. “Every time we get near or at a record, there’s always a pause to see if it’s a reasonable valuation.”
The S&P 500 trades at 17.8 times the reported earnings of its companies, near the highest level since 2010. The Nasdaq 100 has a price-earnings ratio of 23.6. It topped 24 this month for the first time since 2010.
Volatility Spike
The Chicago Board Options Exchange Volatility Index, the gauge known as the VIX, increased 20 percent to 15.98 today, the most since July. The index slid 11 percent yesterday after surging 24 percent over the prior three days.
Eight of the 10 main S&P 500 groups retreated at least 1 percent today, with technology shares sinking 2.1 percent to pace losses. Materials producers plunged 1.3 percent. No stock in the benchmark gauge climbed more than 1 percent.
Apple’s 3.4 percent slide was the biggest since Sept. 3. The company pulled a new mobile-software update after the program caused some people to lose cellular service yesterday. Scores of consumers also criticized the new 6 Plus iPhone and how it can bend.
Biogen Idec dropped 3.6 percent and Illumina Inc. slid 2.8 percent to pace declines in the technology-heavy Nasdaq 100. The two had rallied at least 90 percent in 2013.
Allegheny Technologies sank 4.8 percent for the biggest drop in the equities benchmark. The metals miner led losses among material producers as commodities declined after the dollar touched a four-year high.
source: Bloomberg