Weak economic signals send stocks on spiral
NEW YORK -- A series of weak economic reports sent the stock market plunging to its lowest level in a month on Wednesday.
Companies like miners, banks and chemical makers, whose fortunes are most closely tied to the prospects for growth, led the market lower. That's a sign investors are becoming less confident in the U.S. economy.
The troubling data included weak hiring at private companies, a plunge in mortgage applications and sluggish orders to U.S. factories.
The Dow Jones industrial average fell 217 points and finished at 14,960, a drop of 1.4 percent. It's the first close below 15,000 since May 6 and the biggest decline in seven weeks. Intel fell the most in the Dow.
Stocks started lower and declined steadily throughout the day. After rising every month this year and climbing to record levels this spring, some investors said a significant pullback was overdue.
"The rally is tired and people are taking some profits." said Brad Reynolds, at investment advisor LJRP.
Investors were also unnerved by a sharp 11.5 percent drop in mortgage applications last week. That's a disappointment because the rebound in housing has been one of the key factors supporting the stock market's record-breaking rally this year.
Housing stocks slumped in response. D.R. Horton dropped 27 cents, or 1.2 percent, to $22.65. Beazer Homes fell 60 cents to $18.78, a decline of 3.1 percent.
The fall in applications came as mortgage rates rose the highest point since April 2012. The increase is being driven by higher yields in the bond market. The yield on the 10-year Treasury note climbed as high as 2.2 percent last week, the highest in more than two years.
There was also disappointing news on hiring, another one of the key supports for the market's rally this year.