U.S. stocks sink on falling business confidence
NEW YORK — US stocks closed sharply lower Tuesday as investors digested a positive start to earnings season, a eurozone deal to help support Spain and its banks, and disappointing Chinese trade data.
A slump in confidence registered by a US small-business survey and warnings on the corporate front “became the ‘anxiety du jour,'” Charles Schwab & Co. analysts said.
The Dow Jones Industrial Average dropped 83.17 points (0.65 percent), closing at 12,653.12.
The S&P 500 fell 10.99 points (0.81 percent) to 1,341.47, while the tech-rich Nasdaq skidded 29.44 (1.00 percent) to 2,902.33.
The National Federation of Independent Business said its small-business optimism index fell in June to its lowest reading since last October.
“Political uncertainty remains historically high and continues to be a primary cause for a reticence among small-business owners to expand,” the NFIB said.
“After slow but steady improvement over the first half of this year, small business optimism soured considerably in June,” said Leslie Levesque at IHS Global Insight.
Alcoa dived 4.1 percent, the steepest decliner on the 30-stock Dow. The aluminum giant unofficially kicked off earnings season after the markets closed Monday, reporting results in line with expectations.
Dow member Caterpillar shed 3.5 percent, while Intel fell 2.3 percent. The chipmaker announced it would pump about $4.1 billion into Dutch company ASML Holding. US-traded ASML shares jumped 8.5 percent.
Kraft Foods was the biggest blue-chip gainer, up almost 1.0 percent.
On the Nasdaq, Advanced Micro Devices plunged 11.2 percent after the microprocessor maker lowered its second-quarter revenue forecast.
The US indices fell more modestly Monday as the slow economy and worries about European stability and Chinese growth dragged down sentiment.
The bond market firmed. The yield on the 10-year Treasury slipped to 1.50 percent from 1.51 percent Monday, while the 30-year fell to 2.59 percent from 2.62 percent.
Bond prices and yields move in opposite directions.