close
MENU
Hot Topic NBR Focus: GMO
Hot Topic NBR Focus: GMO
2 mins to read

US house sales slump sinks stocks on Wall Street

Stocks on Wall Street have slumped for a fourth day as a record drop in US existing home sales added to concerns about the future of the economy.House sales in July sales plunged a record 27.2% to their lowest level in 15 years as inventories soared. The

Nevil Gibson
Wed, 25 Aug 2010

Stocks on Wall Street have slumped for a fourth day as a record drop in US existing home sales added to concerns about the future of the economy.

House sales in July sales plunged a record 27.2% to their lowest level in 15 years as inventories soared. The 10-year Treasury yield was pushed down to 2.50% after briefly touching its lowest level since March 2009.

The US dollar also lost ground against some other higher-yielding currencies, and investors moved into the yen.

At the close, the Dow Jones Industrial Average was down 133.81 points, or 1.3%, to 10,040.60. Earlier, the index briefly fell below 10,000.

The Nasdaq Composite Index was down 1.7% to 2123.76 and the S&P 500 index slid 1.4% to 1051.90.

Other markets: Europe, Asia down

European stocks fell as a profit warning from the European construction sector added to fears over the sustainability of the global recovery.

Irish building-materials company CRH issued a profit warning as it posted worse-than-expected first-half results. The shares fell nearly 17% lower and had a knock-on effect on the rest of the sector.

Wolseley shares fell 5.1%, Saint-Gobain lost nearly 4.7% and the Stoxx Europe 600 index for construction closed down 4.2%.

The Stoxx Europe 600 index closed down 1.7% at 249.44. The UK's FTSE 100 index fell 1.5% at 5155.95, France's CAC-40 index dropped 1.7% at 3491.11 and Germany's DAX shed 1.3% to 5935.44.

Asian stock markets ended down across much of the region as the yen's rise pressured exporter shares in Tokyo and knocked the Nikkei Stock Average to a 15-month low. It breached the 9000-point level to end at 8995.1, its lowest close since May 2009.

Australia's S&P/ASX 200 fell 1.1% to 4381.34 and Hong Kong's Hang Seng Index was off 1.1% at 20658.71.

Commodities: Oil down, gold up

Crude-oil futures extended a four-day slide, falling below $US72 a barrel. Light, sweet crude for October delivery was down $US1.20, or 1.6%, at $US71.90 a barrel in New York.

Gold futures staged a comeback, reversing from losses after existing-US home sales had their biggest-ever one-month drop. The December delivery contract was up $US6.90, or 0.6%, to $US1233.80 an ounce in New York.

Gold had fallen to $US1211.70 earlier and spent most of its first hours of floor trading in the red.

Currencies: Yen up, dollar down

The dollar weakened sharply after US housing data came in well under expectations.

The euro reversed earlier declines against the dollar to briefly rise above $US1.27 and it bounced off a nine-year low against the yen following the data's release. Other higher-yielding currencies, such as the Canadian and Australian dollars, pared earlier losses.

The dollar extended its retreat against the yen after the data was released, hitting ¥83.61, the lowest since June 1995. Earlier the dollar had dropped through a series of 15-year lows as investors probed the determination of Japanese authorities to hinder their currency's advance.

The Swiss franc set a fresh record against the euro at 1.3049 francs, breaking the July 1 record of 1.3073 francs, The dollar also weakened sharply, about 1%, against the Swiss currency.

The dollar was at ¥84.31, compared with ¥85.22 late on Monday. The euro weakened to ¥106.92 from ¥107.91, after falling to as low as ¥105.45.

The euro inched up to $US1.2682 from $US1.2663. The UK pound moved to $US1.5462 from $US1.5516. The US dollar weakened to 1.0293 Swiss francs from 1.0412 francs.

Nevil Gibson
Wed, 25 Aug 2010
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
US house sales slump sinks stocks on Wall Street
7886
false