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US stocks tumble 2% in broad sell-off, Dow drops more than 300 points

Published on Aug 1, 2014 6:24 AM
Trader Peter Tuchman throws his hands in the air at the closing bell of the New York Stock Exchange on July 31, 2014 in New York City. The Dow Jones Industrial Average plunged 317 points on the Argentina default and weak corporate earnings. -- PHOTO: AFP

NEW YORK (AFP) - US stocks Thursday plummeted about two per cent in a broad sell-off attributed to a range of factors, including weak eurozone data, the Argentine debt default and disappointing US corporate earnings.

The Dow Jones Industrial Average tumbled 317.06 points (1.88 per cent) to 16,563.30, erasing all its gains since the end of 2013.

The broad-based S&P 500 sank 39.40 (2.00 per cent) to 1,930.67, a seven-week low, while the tech-rich Nasdaq Composite Index fell 93.13 (2.09 per cent) to 4,369.77.

The rout followed a dreary day on European bourses, where the German DAX sank nearly two per cent and indices in Britain and France fell sharply after eurozone data revived concerns about deflation and Adidas issued an earnings warning linked to the crisis in Ukraine.

Other big drags on the market included the Argentine debt default and disappointing earnings from Whole Foods Market (-2.3 per cent), Kraft Foods (-6.4 per cent) and others.

Some analysts also pointed to lingering concerns about high stock valuations after a string of records this summer by the Dow and S&P 500.

Michael James of Wedbush Securities said a "terrible" report by the Institute of Supply Management on midwestern manufacturing revived concerns about the US economic recovery.

"There isn't one thing you can point to," James said. "It's an accumulation of concerns that have kind of broken the dam today." All 30 members of the Dow blue-chip club finished lower.

The biggest loser was oil giant ExxonMobil, which sank 4.2 per cent after it reported a 5.7 per cent drop in oil and gas output even as it scored a 28 per cent rise in second-quarter earnings.

Other big losers included Chevron (-2.5 per cent), which reports earnings Friday, and Nike (-3.1 per cent).

Johnson & Johnson, also in the Dow, dropped 2.2 per cent on reports it is recalling a surgical tool used to eliminate fibroids in women on concerns the device can spread cancers.

Leading tech firms were not spared. Apple lost 2.6 per cent and Facebook and Google both dropped 2.7 per cent.

US retailing giant Target lost 2.9 per cent as it tapped former top Pepsi executive Brian Cornell as its new chief executive seven months after a data-hacking scandal rocked the company.

Bond prices were mixed. The yield on the 10-year US Treasury edged up to 2.56 per cent from 2.55 per cent on Wednesday, while the 30-year held steady at 3.31 per cent. Bond prices and yields move inversely.