Stocks suffered their biggest pullback in two months Thursday, with the Dow Jones industrials logging a triple-digit decline as a disappointing bond auction and a lackluster report on sales of existing homes halted the market’s two-day rally.
NEW YORK (AP) — Stocks suffered their biggest pullback in two months Thursday, with the Dow Jones industrials logging a triple-digit decline as a disappointing bond auction and a lackluster report on sales of existing homes halted the market’s two-day rally.
The market drifted lower for much of the session after the National Association of Realtors said sales of U.S. existing homes fell 0.8 percent in December to a seasonally adjusted annual rate of 6.22 million. Then, in the afternoon, a less-than-enthusiastic reception for the Treasury’s latest sale of five-year notes sent bond prices falling and yields rising sharply, rattling stock investors already worried about higher rates.
Stocks fell further while the yield on the 10-year Treasury note rose to a three-month high.
Earlier in the day, investors’ cheer over quarterly reports from eBay Inc., Nokia Corp., AT&T Inc. had failed to translate to gains as strong earnings news had done in previous days.
“We had a great run,” said Ryan Larson, senior equity trader at Voyager Asset Management, a division of RBC Dain Rauscher. “I think people are kind of tired right now and looking for other avenues.”
According to preliminary calculations, the Dow fell 119.21, or 0.94 percent, to 12,502.56.
Broader stock indicators also fell. The Standard & Poor’s 500 index fell 16.23, or 1.13 percent, at 1,423.90 and the Nasdaq composite index was down 32.04, or 1.30 percent, at 2,434.24. The pullback comes a day after the Nasdaq rose well over 1 percent and the Dow set record trading and closing highs.
Bonds fell in response to the auction and the Realtors’ news, which also showed the inventory of existing homes available for sale fell 7.9 percent to 3.51 million. The yield on the benchmark 10-year note jumped to 4.87 percent from 4.81 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices fell.