The Dow fell 206.51, or 2.1 percent, to 9,859.76. It closed at 10,066 on Monday and has fallen 1,346 points, or more than 12 percent, from its recent high of 11,205, reached April 26.
Investors also exited the euro and commodities including oil and again sought the safety of Treasurys. That sent yields and interest rates lower. The benchmark 10-year note’s yield fell to its lowest level since April 2009.
World stock markets also fell sharply.
A disappointing report on U.S. home prices added to the market’s dark mood. The Standard & Poor’s/Case-Shiller 20-city home price index fell 0.5 percent in March from February, a sign that the housing market remains weak even as mortgage rates are near historic lows. There are concerns that last month’s expiration of the government’s home buyer tax credit will hurt sales in the coming months.
A better-than-expected report on consumer confidence had no lasting effect on trading. The Conference Board’s consumer confidence index rose for the third straight month, climbing to 63.3 in May from 57.7 last month.
Investors are not focusing as much on current signs of growth, but instead trying to gauge where the global economy will be later this year. Pessimism, particularly about Europe, has replaced the hopeful tone the market took early in the year.
- Associated Press