http://www.foxbusiness.com/story/markets/pre-data-jitters-wall-street/The Dow tumbled nearly 200 points Thursday afternoon as the markets fret about the U.S. losing its "AAA" credit rating after Standard & Poor's warned it may need to downgrade the U.K.'s perfect rating.
Today’s Markets
As of 2:34 p.m. EDT., the Dow Jones Industrial Average lost 179.68 points, or 2.13%, to 8242.51, the S&P 500 fell 21.50 points, or 2.38%, to 882.17 and the Nasdaq Composite sank 45.59 points, or 2.63%, to 1682.50. The consumer-friendly FOX 50 dropped 15.33 points, or 2.30%, to 650.33.
“The mood is kind of bearish. They’ve been expecting a pullback and it looks like we’re in the process of getting it,” NYSE trader Bernie McSherry of Cuttone & Co. told FOX Business. “People here are a little bit leery of this rally."
The selloff came in the face of a slightly better-than-expected report on initial jobless claims and several positive earnings reports from retailers like Buckle (BKE: 34.37, 1.52, 4.63%) and Barnes & Noble (BKS: 24.34, 0.42, 1.76%). The losses threaten to wipe out the rest of this week's gains as the markets suffered a late-day dive on Wednesday led by the financial sector.
“It seems like a little bit of continuation of a correction that’s well warranted and needed. We had that big rally and now we’re kind of pulling back,” said Ryan Detrick, equity analyst at Schaeffer’s Investment Research. “We still think this market is going to go higher but a break is well warranted.”
Nearly all 30 components of the Dow were in the red, led by Caterpillar (CAT: 35.62, -1.67, -4.48%) and Alcoa (AA: 8.93, -0.55, -5.8%). Other blue-chip stocks like General Motors (GM: 1.69, 0.26, 18.18%) and JPMorgan Chase (JPM: 34.5, -0.04, -0.12%) made headway.
Stocks hit session lows after Bill Gross, co-chief investment officer at PIMCO, told Reuters that the markets are worried the U.S. is "going the way of the U.K. - losing AAA rating, which affects all financial assets and the dollar." S&P said Thursday it may take away the U.K.'s coveted rating if its next government doesn't slash soaring debt levels. That news sent European markets tumbling, led by a 2% dive for London's FTSE 100.
“It’s certainly prompting people to sell first and ask questions later. I think it’s getting a little overdone,” said Michael James, senior equity trader at Wedbush Morgan Securities.
Energy stocks like Schlumberger (SLB: 51.69, -3.33, -6.05%) were the biggest drags on Wall Street as crude oil sank lower after hitting a fresh six-month high Wednesday on a bullish inventory report. Crude pared some of its losses but ended down $1.02 per barrel at $61.02.
Commodities were lower across the board, sending shares of basic material stocks like Allegheny Technologies (ATI: 33.8202, -2.9997, -8.15%) and Freeport-McMoran (FCX: 48.12, -1.83, -3.66%) sharply lower.
Topic: USA could LOSE AAA credit rating (This would be HUGE) (Read 551 times)