Stocks Fall for Fifth Straight Session
NEW YORK ( TheStreet) -- Stocks sustained deep losses Tuesday with eurozone worries once again front and center amid growing trepidation about Spain's economic stability.
All three major U.S. equity indices lost ground for a fifth straight trading session. Sentiment took an abrupt turn for the worse after European stock markets finished with sharp drops. Traditional safe havens drew buyers with bonds and gold on the rise.
The Dow Jones Industrial Average dropped 214 points, or 1.7%, to close at 12,716. The S&P 500 fell 24 points, or 1.7% to close at 1359. The Nasdaq plunged 56 points, or 1.8%, at 2991, surrendering the 3000 level for the first time since March 13.
The 10-year Treasury bond rose 18/32, pushing the yield down to 1.98%, its first trip below 2% since March 12.
Breadth within the Dow was extremely negative with only one of of the index's 30 components -- Hewlett Packard (HPQ) --finishing higher.
Profits came in at 10 cents per share on revenues of $6 billion on improved productivity and market conditions. Alcoa was expected to post a loss of 4 cents a share on revenue of $5.77 billion. Shares were rebounding 4% in the extended session.
Bank of America (BAC) saw the largest drop among the blue chips on Tuesday, falling more than 4%.
On the New York Stock Exchange, decliners outnumbered advancers by more than 6-to-1 ratio, while the Nasdaq exchange had five losers for every gainer. The VIX, known as Wall Street's fear gauge, was up more than 8% at 20.39, breaking above the 20 level, which is seen as indicative of rising fear, for the first time since March 7. The index measures the implied volatility of options activity in the S&P 500.
The weakness extended losses on Monday in the wake of Friday's disappointing jobs report. The Dow posted its first finish below 13,000 since March 12 after the government announced that nonfarm payrolls increased 120,000 in March, far short of the consensus view for a 200,000 gain.
The driver for Tuesday's nervousness about Europe was a spike in the yield on Spanish ten-year bonds in the secondary market to 5.93% from 5.74% as Central Bank Governor Miguel Angel Fernandez Ordonez warned that the nation's banks may require more capital if the economy continues its downward slide. The economy is expected shrink 1.7% or worse as the government enforces its severe austerity measures.
European stocks endured a brutal sell-off into the close, with the London's FTSE declining 2.2% while Germany's DAX fell 2.5%.