NEW YORK (AP) — More evidence of a slowing global economy sent stocks falling Tuesday and threatened to end the market’s three-day rally.
Germany’s economy stalled last quarter and dragged down growth for Europe. In the U.S., reports painted a mixed economic picture: Housing remains weak, but factory output rose last month at its fastest pace since the March earthquake in Japan disrupted global manufacturing.
The Dow Jones industrial average fell more than 120 points in the first half hour of trading before paring most of its losses by noon. Stocks then quickly resumed their decline after the leaders of France and Germany tried to calm worries about Europe’s debt problems by pushing for long-term political solutions instead of immediate financial measures like a single European bond.
The Dow fell 176 points, or 1.5 percent, to 11,307 at 1:06 p.m. The Standard & Poor’s 500 index fell 22 or 1.9 percent, to 1,182. The Nasdaq composite fell 57, or 2.2 percent, to 2,497.
“Investors don’t know which way to go here,” said Paul Brigandi, senior vice president of Direxion Funds, which has $7 billion in assets under management. Stocks look cheaper after the S&P 500’s 10.4 percent drop from July 21 to Monday, but investors are still worried about the global economy and debt problems in both the United States and Europe.
Prices for gold and Treasurys rose as dollars moved into investments considered safer. Oil fell on worries that a weaker economy will mean less demand for energy.
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