 "US stocks drop as weak data fuel sell-off")
The Standard & Poor's 500 Index wiped out its gains for the year as banks sank after reporting earnings while a drop in retail sales reignited concern about the economy and a second health worker in Texas caught Ebola.
KeyCorp retreated 8.9 per cent, the biggest drop in the S&P 500, after the lender's quarterly revenue trailed analysts estimates. Bank of America Corp sank 5.3 per cent after revenue declined. A group of bank shares in the S&P 500 lost 4.7 per cent, the most since 2012. Intel Corp, JPMorgan Chase & Co and Boeing fell more than 3.8 per cent to lead the Dow Jones Industrial Average to its biggest drop in almost two years.
The S&P 500 tumbled 2.3 per cent to 1,834.07 at 1:55 pm in New York and lost as much as three per cent, its worst intra-day retreat since 2011. The index is down 0.7 per cent for the year and has lost 8.8 per cent since a record on September 18. The Dow fell 384.67 points, or 2.4 per cent to 15,930.52. The Nasdaq Composite Index sank 1.9 per cent.
The Chicago Board Options Exchange Volatility Index, the benchmark gauge of options prices known as the VIX, jumped 32 per cent to 30.08, the highest level since 2011, amid demand for protection against losses in equities. All but 14 stocks in the S&P 500 retreated on Wednesday and each of its 10 main industry groups declined at least 1.9 per cent. Trading volume for stocks in the index was double the 30-day average at this time of day.
Retail sales in the US dropped more than forecast in September, decreasing 0.3 per cent after a 0.6 per cent gain in August that was the biggest in four months, Commerce Department figures showed. The median forecast of 81 economists surveyed by Bloomberg called for a 0.1 per cent decline.
Another report on Wednesday showed manufacturing in the Federal Reserve Bank of New York's region slowed more than projected in October. The bank's so-called Empire State index dropped to 6.2 this month from an almost five-year high of 27.5 in September. Readings greater than zero signal growth.
Concern about the spread of Ebola has also started to affect investor psychology, contributing to a 20 per cent decline in US airline stocks since a high in September and contributing to plunges in broader averages. A second health care worker in Texas tested positive after caring for an Ebola patient, opening new questions about oversight lapses.
Financial stress
Financial stress is rising, according to gauges maintained by the Federal Reserve Banks of Chicago and St. Louis, as well as measures compiled by Goldman Sachs Group Inc and Bank of America Merrill Lynch. The deterioration reflects tightening credit conditions for companies, higher stock-market volatility and a stronger dollar.
'Bad mood'
"The market was already in a bad, bad mood ahead of the largely known weakness in retail sales this morning," Andrew Wilkinson, chief market analyst at Interactive Brokers LLC, wrote in a note today. "Even the best report of the year would have failed to make much impact on investor sentiment captivated by signs of the bear and other factors such as the spread of the Ebola virus."
In other markets, Greece's Athens Stock Exchange Index plunged 6.3 per cent, the biggest drop since 2012, amid concern the government's plan to end its bailout early will leave the nation unable to raise funding.
Investors are watching earnings for signs of the economy's strength. More than 50 S&P 500 companies are releasing results this week, according to data compiled by Bloomberg. Profit for the members of the index probably rose 4.8 per cent in the third quarter and sales increased 4.2 per cent, analysts projected. American Express Co and eBay Inc will report after the close.
KeyCorp lost 8.9 per cent to $11.75 for its biggest drop in three years. Regions Financial Corp, Bank of America Corp and Citigroup Inc each declined more than five per cent. All 30 stocks in the Dow Jones Industrial Average fell as the gauge extended its 2014 loss to four per cent and slid to an eight-month low.
Market movers
KeyCorp reported that net income slid 13 per cent to $197 million, or 23 cents a share, from $229 million, or 25 cents, a year earlier. Noninterest expense of $704 million was higher than some analysts predicted and Chief Executive Officer Beth Mooney said its acquisition of Pacific Crest Securities LLC last month added to expenses.
Bank of America lost 5.3 per cent, the most since April, to $15.64. Revenue slid 4.3 per cent to $21.2 billion. Noninterest expenses rose 20 per cent to $19.7 billion because of a record $16.7- billion settlement with the government over mortgage probes.
Intel lost 4.8 per cent to $30.59 even after projecting sales that are poised to top analysts' estimates in the fourth quarter as companies snap up personal computers with the latest chips to replace ageing machines.
"The market is transitioning from fear to outright panic," Gene Peroni, portfolio manager at Advisors Asset Management Inc in Conshohocken, Pennsylvania, said in a phone interview. His firm oversees about $14.7 billion in assets. "They're selling things very much across the board, seems to be urgent. We're moving toward the bottom of the market correction. We're probably not quite there yet, but this is a necessary precursor to a bottom, that is, to have this type of panic, selling frenzy."
KeyCorp retreated 8.9 per cent, the biggest drop in the S&P 500, after the lender's quarterly revenue trailed analysts estimates. Bank of America Corp sank 5.3 per cent after revenue declined. A group of bank shares in the S&P 500 lost 4.7 per cent, the most since 2012. Intel Corp, JPMorgan Chase & Co and Boeing fell more than 3.8 per cent to lead the Dow Jones Industrial Average to its biggest drop in almost two years.
The S&P 500 tumbled 2.3 per cent to 1,834.07 at 1:55 pm in New York and lost as much as three per cent, its worst intra-day retreat since 2011. The index is down 0.7 per cent for the year and has lost 8.8 per cent since a record on September 18. The Dow fell 384.67 points, or 2.4 per cent to 15,930.52. The Nasdaq Composite Index sank 1.9 per cent.
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"The economy isn't as strong as perhaps everyone thought," Bruce Bittles, chief investment strategist at Milwaukee-based RW Baird & Co, which oversees $110 billion, said in a phone interview. "The concern here is that the weakness in Europe and Asia is going to be exported to the US and our economy is going to be negatively impacted."
The Chicago Board Options Exchange Volatility Index, the benchmark gauge of options prices known as the VIX, jumped 32 per cent to 30.08, the highest level since 2011, amid demand for protection against losses in equities. All but 14 stocks in the S&P 500 retreated on Wednesday and each of its 10 main industry groups declined at least 1.9 per cent. Trading volume for stocks in the index was double the 30-day average at this time of day.
Retail sales in the US dropped more than forecast in September, decreasing 0.3 per cent after a 0.6 per cent gain in August that was the biggest in four months, Commerce Department figures showed. The median forecast of 81 economists surveyed by Bloomberg called for a 0.1 per cent decline.
Another report on Wednesday showed manufacturing in the Federal Reserve Bank of New York's region slowed more than projected in October. The bank's so-called Empire State index dropped to 6.2 this month from an almost five-year high of 27.5 in September. Readings greater than zero signal growth.
Concern about the spread of Ebola has also started to affect investor psychology, contributing to a 20 per cent decline in US airline stocks since a high in September and contributing to plunges in broader averages. A second health care worker in Texas tested positive after caring for an Ebola patient, opening new questions about oversight lapses.
Financial stress
Financial stress is rising, according to gauges maintained by the Federal Reserve Banks of Chicago and St. Louis, as well as measures compiled by Goldman Sachs Group Inc and Bank of America Merrill Lynch. The deterioration reflects tightening credit conditions for companies, higher stock-market volatility and a stronger dollar.
'Bad mood'
"The market was already in a bad, bad mood ahead of the largely known weakness in retail sales this morning," Andrew Wilkinson, chief market analyst at Interactive Brokers LLC, wrote in a note today. "Even the best report of the year would have failed to make much impact on investor sentiment captivated by signs of the bear and other factors such as the spread of the Ebola virus."
In other markets, Greece's Athens Stock Exchange Index plunged 6.3 per cent, the biggest drop since 2012, amid concern the government's plan to end its bailout early will leave the nation unable to raise funding.
Investors are watching earnings for signs of the economy's strength. More than 50 S&P 500 companies are releasing results this week, according to data compiled by Bloomberg. Profit for the members of the index probably rose 4.8 per cent in the third quarter and sales increased 4.2 per cent, analysts projected. American Express Co and eBay Inc will report after the close.
KeyCorp lost 8.9 per cent to $11.75 for its biggest drop in three years. Regions Financial Corp, Bank of America Corp and Citigroup Inc each declined more than five per cent. All 30 stocks in the Dow Jones Industrial Average fell as the gauge extended its 2014 loss to four per cent and slid to an eight-month low.
Market movers
KeyCorp reported that net income slid 13 per cent to $197 million, or 23 cents a share, from $229 million, or 25 cents, a year earlier. Noninterest expense of $704 million was higher than some analysts predicted and Chief Executive Officer Beth Mooney said its acquisition of Pacific Crest Securities LLC last month added to expenses.
Bank of America lost 5.3 per cent, the most since April, to $15.64. Revenue slid 4.3 per cent to $21.2 billion. Noninterest expenses rose 20 per cent to $19.7 billion because of a record $16.7- billion settlement with the government over mortgage probes.
Intel lost 4.8 per cent to $30.59 even after projecting sales that are poised to top analysts' estimates in the fourth quarter as companies snap up personal computers with the latest chips to replace ageing machines.
"The market is transitioning from fear to outright panic," Gene Peroni, portfolio manager at Advisors Asset Management Inc in Conshohocken, Pennsylvania, said in a phone interview. His firm oversees about $14.7 billion in assets. "They're selling things very much across the board, seems to be urgent. We're moving toward the bottom of the market correction. We're probably not quite there yet, but this is a necessary precursor to a bottom, that is, to have this type of panic, selling frenzy."