By Angela Moon
NEW YORK (Reuters) - U.S. stocks slid to session lows on Tuesday following comments from Dennis Lockhart president of the Atlanta Federal Reserve Bank, that the central bank could start reducing its bond-buying program as soon as September.
The selloff accelerated in late morning after Lockhart, in an interview with Market News International that was picked up by a Wall Street Journal blog, said that while the Fed's easing back on monetary stimulus could come in September, the move could come at any time before the end of the year.
"It's almost as if the market was looking for an excuse to sell, and they found that from Lockhart's comments. It's nothing new, but at these levels, any news from the Fed could serve as a good reason to book profits," said Ryan Detrick, senior strategist at Schaeffer's Investment Research in Cincinnati.
The steep downturn, which drove the three major U.S. stock indexes down to session lows with the Nasdaq briefly down 1 percent, took place around 11 a.m., a Thomson Reuters chart showed. This move extended declines linked to investors taking profits from the recent rally that lifted the Dow Jones industrial average and the S&P 500 to back-to-back record highs late last week.
The market's swings were exaggerated by thin trading volume, which was light for the second consecutive day. Monday marked the lowest volume for a full-day session so far this year. With major U.S. economic data like the nonfarm payrolls report and earnings from bellwethers out of the way, volume is expected to be light throughout the week.
The Dow Jones industrial average was down 104.05 points, or 0.67 percent, at 15,508.08. The Standard & Poor's 500 Index was down 10.21 points, or 0.60 percent, at 1,696.93. The Nasdaq Composite Index was down 27.06 points, or 0.73 percent, at 3,665.89.
Earlier, the Dow fell as low as 15,473.40, while the S&P 500 touched a session low of 1,693.29, and the Nasdaq hit an intraday low of 3,654.67.
The S&P 500 has risen for five of the past six weeks, gaining more than 7 percent over that period. Both the Dow and the S&P_ 500 closed at all-time highs on Friday - for the second day in a row. The S&P's 50-day moving average, now at 1,692.77, could serve as a support level in any market decline.
Retailers' shares were among the day's biggest losers. American Eagle Outfitters
The stock fell to a 52-week low of $16.60 and gave investors a reason to unload the shares of other retailers that cater to teens and young adults. Urban Outfitters
The Dow's worst performer was International Business Machines Corp
Cognizant Technology Solutions Corp
Of the 391 companies in the S&P 500 that reported earnings for the second quarter through Monday, 67.8 percent have topped analysts' expectations, in line with the average beat over the past four quarters, data from Thomson Reuters showed. About 55 percent have reported revenue above estimates, more than in the past four quarters but below the historical average.
The Washington Post Co
In another look at the economy, the Commerce Department said the U.S. trade deficit narrowed sharply in June to its lowest level in more than 3-1/2 years as imports reversed the previous month's spike, suggesting an upward revision to second-quarter growth. The gap narrowed to $34.2 billion, compared with expectations of $43.5 billion.
(Editing by Jan Paschal)
