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Market Recap: Stocks Flounder on Supposed Housing 'Recovery' & EU Reports

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Markets closed down today:

▼ Dow: -0.33 percent

▼ Nasdaq: -0.77 percent

▼ S&P: -0.57 percent

Precious metals:

▼ Gold: -0.56 percent to $1,752.96 an ounce

Silver: +0.58 percent to settle at $33.92

Commodities:

▼ Oil: -1.21 percent

Market closed down because:

A mixed report about the housing market and unrest in Europe on Wednesday extended the longest losing streak for the Standard & Poor's 500 index since mid-July. Other risky assets, like European stocks and oil, fell more sharply.

The Dow Jones industrial average fell 44.04 points, or 0.3 percent, to 13,413.51. The S&P 500 index fell 8.27, or 0.6 percent, to 1,433.32. The only category that rose was utilities, relatively safe stocks that tend to hold their value when the economy is weak.

The Nasdaq composite average fell 24.03 points, or 0.8 percent, to 3,093.70.

The fear is that a broader recession in Europe could stall whatever economic "recovery" is occurring in the U.S., where the housing market has been a major drag for five years.

The median price of new homes sold in August rose by a record amount, while sales of new homes dipped slightly. Sales in August were up 27.7 percent from a year earlier, but remain at about half the pace economists consider healthy.

Stronger data on the U.S. housing market have insulated stocks in recent weeks from a slackening global economy. Stocks' other main source of support has been the Federal Reserve's program to boost the economy by pumping money in. That idea lost some luster Tuesday after a key Fed official said he doubted it will do much good.

And that downgrade probably didn't help anything either.

The dip in home sales hurt homebuilder stocks. PulteGroup Inc. fell 76 cents, or 4.7 percent, to $15.30; KB Home 51 cents, or 3.5 percent, to $13.90 and Beazer Homes USA Inc. 14 cents, or 3.9 percent, to $3.50.

European stocks had their worst day in months as unrest threatened to boil over in Greece, where deep budget cuts have eroded people's living standards, and Spain, where citizens are resisting a likely bailout from international lenders. Earlier, Asian stocks closed lower.

Spain's IBEX index fell the most, closing down 3.9 percent. Italy's FTSE MIB fell 3.3 percent, Germany's DAX 2 percent and France's CAC-40 2.8 percent.

The euro fell sharply against the dollar, and the price of oil closed below $90 per barrel for the first time since early August.

The Associated Press contributed to this report.

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