Tuesday, August 2, 2011

Stocks plunge, S&P goes negative for year

U.S. stocks plunged on Tuesday as fears about a weak U.S. economy were enflamed after investors got another disappointing economic report - this time on consumer spending.

The selloff was so broad and so deep it pushed the S&P 500 into negative territory for the year and bond yields to their lowest levels in nine months.

"Now that we have solved the debt ceiling issue the market has moved onto the other data, which has taken a significant turn for the worse," said Ryan Detrick, senior technical strategist with Schaeffer's Investment Research.

The Dow Jones industrial average (INDU) plunged 266 points, or 2.2%, to close at 11,867. The Dow was dragged lower by the industrial and manufacturing heavyweights of the 30-member index: Alcoa (AA, Fortune 500), General Electric (GE, Fortune 500), United Technologies (UTX, Fortune 500) and Boeing (BA, Fortune 500).

This was the eighth-straight day of declines for the Dow -- a losing streak not seen since October 2008, when the financial system was in the depths of the crisis. The Dow has fallen roughly 6.7% since the sell-off began on July 22. (more)