By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- A late afternoon selloff on Wall
Street sent U.S. stocks lower on Tuesday, with the Dow Jones
Industrial Average falling by the most points in more than a
month.
Some analysts pointed to escalation in Iraq as a possible
trigger, while others said that it was a mere profit-taking at the
end of the quarter.
The S&P 500 (SPX) ended the session 12.63 points, or 0.6%,
lower, after briefly touching an intraday record. Energy sector
stocks were hit the hardest, with the sub sector down 2%.
The Dow Jones Industrial Average (DJI) dropped 119.13 points, or
0.7%, to 16,813.13. The Nasdaq Composite (RIXF) lost 18.32 points,
or 0.4%, to 4,350.36. As selling intensified, the CBOE Vix index
(VIX) jumped 10% to above 12.
Read the recap of MarketWatch's live blog of today's
stock-market action.
"Investors have generally paid little attention to the fighting
in Iraq. But stocks dropped today due to the possibility of
escalating violence and slightly higher oil prices," said Kate
Warne, investment strategist at Edward Jones.
Channing Smith, managing director at Capital Advisors, doubted
it was Iraq news that triggered a selloff.
"If Iraq is a concern, why energy sector is sharply down? I
think markets simply have been overbought and are now taking a
breather, with investors taking profit at the end of the quarter"
Channing said.
Stocks initially rose on the back of positive economic reports,
including new-home sales, home prices and consumer confidence data,
but gains evaporated by afternoon.
New U.S. homes sold at an annual rate of 504,000 in May to mark
the fastest increase in six years, the government said Tuesday. Yet
the surprising gain -- economists polled by MarketWatch expected a
440,000 increase -- was led by a huge surge in the Northeast. Sales
of existing homes in May hit the fastest pace in seven months.
Home prices rose in April as the spring selling season got
underway, even as annual growth skidded, dropping to the slowest
pace in more than a year, according to data released Tuesday
morning. April data show that home-price growth has turned
S&P/Case-Shiller's price barometer tracking 20 cities showed
that year-over-year price growth hit 10.8% in April -- a fast pace
but down sharply from annual growth of 12.4% in March and a recent
peak of 13.7% in November.
A gauge of consumer confidence rose to 85.2 in June -- the
highest level since January 2008 -- from 82.2 in May, the
Conference Board Tuesday.
Walgreen disappoints, Vertex soars on drug trial news
In corporate news, cruise company Carnival Corp. (CCL) beat
consensus profit and revenue estimates and raised its full-year
outlook. However, shares fell 3%.
Shares of Walgreen Co. (WAG) also fell 1.7% after the drugstore
chain operator missed Wall Street estimates.
Vertex Pharmaceuticals (VRTX) shares rocketed 40% to $95.53
after announcing that two Phase 3 trials of its cystic fibrosis
treatment met their primary endpoint.
xG Technology Inc. (XGTI) shares soared 25% to $2.31 after the
wireless communications firm said it was selected by the U.S. Army
as a subcontractor to provide communications and network services.
The deal is worth $497 million.
Elizabeth Arden (RDEN) stock fell 3.1% after the company's board
released details of a broad restructuring program, according to a
filing with the U.S. Securities and Exchange Commission.
Asian stocks rise, European shares turn lower
In Asia overnight, equities ended mostly higher ahead of a
presentation of an economic reforms package by Japanese Prime
Minister Shinzo Abe. In Europe, the Stoxx Europe 600 closed lower
after a downbeat German business confidence survey.
Among commodities, crude-oil (CLQ4) settled lower for a second
straight session, but kept their grip on the $106-a-barrel. Gold
futures (GCQ4) settled higher to mark their fifth straight session
gain. The shiny metal settled $2.9 higher at $1,321.30.
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