While you were sleeping: UPDATED Dow drop ends nine-day rally

Stocks on Wall Street fell, ending a rally that had taken the market to new highs.

The Dow Jones Industrial Average had climbed for nine consecutive sessions and closed at records seven days in a row, leaving it up 6.7% for the year at the end of the session. 

Shares of Southwest Airlines sank, trading 11% lower after its latest quarterly results bolstered concern about its fares. Shares of other airlines followed suit.

"While solid traffic demand has continued into July, thus far, the fare environment remains challenging and close-in yields have softened in recent weeks," Southwest CEO Gary Kelly said in a statement.

At the close, the Dow was down 77.80 points, or 0.4%, to 18,517.23. The Nasdaq Composite Index declined 0.3% to 5073.90 and the Standard & Poor's 500 Index retreated 0.4% to 2165.17.

Energy stocks also fell. US crude lost 2.2% to $US44.75 a barrel as a glut of gasoline continued to weigh on prices. The move brought crude oil down 7.4% for the month.

A drop in Intel shares, last down 4.0%, led the slide of the Dow. Pacing the decline were shares of American Express and those of Nike, down 1.6% and 1.3% respectively.

Although Intel's latest earnings disappointed investors, rival Qualcomm surprised with better-than-expected results. Qualcomm shares rose 7.2%.

Housing data better than expected
The latest US housing data were better than expected. Total existing-home sales climbed 1.1% to a seasonally adjusted annual rate of 5.57 million in June from a downwardly revised 5.51 million in May, the National Association of Realtors said.

"Sustained job growth as well as this year's descent in mortgage rates is undoubtedly driving the appetite for home purchases," Lawrence Yun, NAR chief economist, said in a statement.

"Looking ahead, it's unclear if this current sales pace can further accelerate as record high stock prices, near-record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing."

Even so, the US economy appears in good shape.

"The economy is doing well and is weathering the global turbulence," Thomas Costerg, a US economist at Standard Chartered Bank in New York, told Reuters. "With housing and consumers powering ahead, some of the clouds are dissipating and summer looks good from a data point of view."

The European Central Bank's Governing Council kept, as had been expected, its key interest rate steady in its first policy meeting since the UK's vote to exit the European Union. President Mario Draghi flagged that the central bank might add fresh stimulus later this year, if needed.

"If warranted to achieve its objective, the Governing Council will act by using all instruments available within its mandate," Mr Draghi told reporters in Frankfurt, according to Bloomberg. "I would stress readiness, willingness, ability, to do so."

Europe's Stoxx 600 Index finished the day with a decline of just under 0.1% from the previous close. France's CAC 40 index slipped 0.1%, while the UK's FTSE 100 index fell 0.4%. Germany's DAX index gained 0.1%.

"Now it's all about holding on, not panicking and reassessing fundamentals. Company earnings could give us some direction here,"Patrick Moonen, a multi-asset strategist at NN Investment Partners, told Bloomberg.

"But we're all waiting for data that shows us whether economic growth will be affected by Brexit, and whether central banks really need to do more."

(BusinessDesk)

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