US stocks tumbled broadly on Tuesday as renewed concerns about global growth sent investors away from companies such as Boeing, Alcoa and Caterpillar, toward the safety of the US dollar and Treasuries.
The Dow Jones Industrial Average dropped 268.22 points (2.65%) to 9,870.30, its second-lowest close this year. Tuesday also represented the Dow's biggest one-day drop since June 4. It is now down 5.35% for the year to date.
All of the Dow's 30 components ended the session in the red. Boeing was the measure's worst performer with a drop of $4.26 (6.3%) to $63.04. Alcoa fell 69 cents (6.3%) to $10.34, and Caterpillar declined $3.55 (5.5%) to $60.85.
The Nasdaq Composite sank 85.47 (3.85%) to 2,135.18, its lowest close since Feb. 8 and biggest one-day drop since May 20. The measure is off 5.9% for the year to date.
The Standard & Poor's 500 slid 33.33 (3.10%) to 1,041.24, its lowest close since Oct. 30, 2009. It is down 6.62% for the year.
All of the S&P 500's sectors fell, with the industrial, financial and technology sectors tumbling more than 3.8% each. The consumer-staples, telecommunications and health-care sectors, which are perceived as safer, had the smallest declines.
Just one of the S&P 500's components managed to eke out a gain: Zimmer Holdings, which edged up 3 cents (0.1%) to $54.60. Analysts raised their investment rating on the stock to buy from neutral, saying the market is underestimating the orthopedic device maker's growth potential.
The slide elsewhere came after the Conference Board sharply revised lower its April leading economic indicator for China, reigniting investors' fearsover how a slowdown in China could impact global growth. The market is also concerned about how European banks will fare after the end of the European Central Bank's 12-month liquidity facility on Thursday.
Adding to the worries, data from the Conference Board showed US consumer confidence dropped in June.
Micron Technology fell $1.35 (13%) to $8.67 as Wall Street poked at possible cracks in memory-chip demand despite the company's relatively strong fiscal third-quarter results. Stable and sometimes declining prices over the past month "could be a precursor to further declines" in the prices of memory chips, an analyst said in a note to clients.
American depositary shares of Baidu tumbled $6.87 (9.2%) to $67.57 after Google said it will change the way it operates in China to keep providing online content in the country. Google slipped $17.82 (3.8%) to $454.26.
Smithfield Foods rose 20 cents (1.3%) to $15.08 as Brazilian newspaper Valor Economico reported that JBS SA may be in talks to acquire the pork processor.
Emerson Electric slumped $1.56 (3.5%) to $43.29. The US power and industrial-automation company returned with a sweetened offer to buy Chloride Group PLC for almost GBP1bn, after the UK secure power systems company, rebuffed an earlier bid and backed a better deal from Swiss engineer ABB Ltd. American depositary shares of ABB slid 76 cents (4.2%) to $17.49.
General Electric declined 52 cents (3.5%) to $14.48. A federal appeals court on Tuesday rejected the conglomerate's constitutional challenge to part of the federal Superfund law that gives the Environmental Protection Agency the power to order companies to clean up sites contaminated with hazardous waste. The US Court of Appeals for the District of Columbia Circuit ruled unanimously that the Superfund law didn't violate GE's constitutional due-process rights.
For Australian ADRs listed on the NYSE, BHP Billiton dropped $3.34 (5.01%) to US$63.37, Rio Tinto Plc shed $2.98 (6.16%) to US$45.42, ResMed lost $1.11 (1.8%) to US$60.53, Telstra Corporation dipped 70 cents (4.86%) to US$13.70, Telecom Corporation of NZ declined 27 cents (4.01%) to US$6.47 and Westpac slid $4.99 (5.34%) to US$88.50.
In economic news, The Conference Board's index of consumer confidence for June dropped to 52.9 from 62.7 in May, which was lowered from 63.3.
The June reading is far below economists' expectations of 62.5, and reflects concerns about the US jobs outlook and economic recovery.
US home prices showed an increase in April from a month earlier, according to the S&P Case-Shiller home-price indexes, boosted by the expiration of the federal first-time home-buyer tax credit.
At 7:45 AM (AEST), the 10-year Treasury note yield was 2.95% and the five year yield was 1.77%.
Stocks in Europe on Tuesday slumped in the worst single-day decline in more than a month, on fears about the strength of the economies of the US and China as well as the health of the European banking sector.
The Stoxx Europe 600 dropped 3% to 243.82, more than eliminating Monday's advance, dragged down in particular by companies exposed to China following the 4.3% slump in the Shanghai Composite.
The Conference Board's Chinese leading indicator for April was revised sharply lower, and the same group's US consumer confidence gauge tumbled in June.
ArcelorMittal, the world's top steelmaker, dropped 6.3%, and Rio Tinto, the mining giant, fell 6.4%.
Financials also suffered, with Spain's BBVA dropping 7.2%. Intesa Sanpaolo, hurt by a downgrade, slumped 7.8%. A newspaper reported that Spanish banks are lobbying the European Central Bank to take action to ease the impact from Thursday's expiration of a one-year, EUR442bn funding program.
All the major indexes suffered. The UK FTSE 100 dropped below the 5,000 mark, retreating 3.1% to 4,914.22 and the German DAX fell below the 6,000 level, retreating 3.3% to 5,952.03. The French CAC 40, loaded with institutions leveraged to Southern Europe, fell 4% to 3,432.99.
Gainers were few and far between. Chloride Group climbed 11.1% to 387 pence after Emerson Electric bid 375 pence a share, or GBP997m, for the UK power systems company, which trumps the 325 pence a share bid made by ABB. ABB, which said it is considering its options, declined 5%.
HMV, the music and video games retailer, shot up 7% ahead of its annual results due out on Wednesday.
Asian shares ended lower on Tuesday, with many regional markets weighed down after Shanghai stocks retreated sharply to end at a 14-month low on concerns the mainland economy could slow down in coming months.
China's Shanghai Composite reversed early gains to tumble 4.3% for its worst percentage fall in more than a month to end at 2,427.05, its lowest finish since April 28, 2009. The sharp reversal also dragged down other regional markets, with Hong Kong's Hang Seng Index down 2.3% and Japan's Nikkei Stock Average off 1.3%.
New Zealand shares closed lower in light trade as most investors remained firmly sidelined by weak offshore markets and few local drivers. The NZX-50 ended down 0.6%, or 17.34 point, at 2,991.07.
Base metals closed lower after disappointing data out of China and the US sent the equity markets tumbling, and analysts said a steady flow of economic releases will continue to drive direction in the days ahead. Aluminium fell $55 (2.71%) to $1,955 while copper weakened $315 (4.63%) to $6,490 and nickel dropped $1,120 (5.51%) to $19,210. Zinc shed $95 (5.11%) to $1,765 and lead lost $110 (6.01%) to $1,720. Comex copper was last quoted at 293.05 US cents per pound.
Gold futures eked out slight gains while growth-sensitive markets capitulated to fears about a faltering worldwide economic recovery. Spot gold was last quoted at $1,240.45. Comex gold futures firmed $3.80 (0.31%) to $1,242.40. Spot silver was last quoted at $18.49.
Crude-oil fell to a two-week low in a rout across many commodities and equities markets as fears of a slowdown in global growth hit prospects for increased oil demand. West Texas Intermediate was last quoted at US$75.94 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.8207 euros, 88.52 yen, 1.180 AUD and 66.43 pence.