A steep decline in pending home sales renewed fears of a credit crunch on Wednesday, sending stocks tumbling.
The National Association of Realtors reported a 12.2% decline in existing home contract signings in July, before the worst of the credit crunch hit in August, and the Federal Reserve’s monthly Beige Book summary of economic conditions confirmed that the subprime mortgage market meltdown is hurting home sales. A weak ADP employment report raised fears that the government’s monthly jobs report on Friday will also be weak.
The result was a 1% decline in the major stock averages, led by Apple , which fell 5% after announcing steep iPhone price cuts and unveiling new iPods.
Finisar plunged after warning that its sales will come in below estimates.
Applix soared on a buyout offer from Cognos
, and Check Point
edged higher on an upgrade. eBay
was another gainer.
The Nasdaq fell 24 to 2605, the S&P 500 lost 17 to 1472, and the Dow fell 143 to 13,305. Volume rose to 2.99 billion shares on the NYSE, and 2 billion on the Nasdaq. Declining issues led by a 23-9 margin on the NYSE, and 20-10 on the Nasdaq. Downside volume was 81% on the NYSE, and 71% on the Nasdaq. New highs-new lows were 39-69 on the NYSE, and 70-61 on the Nasdaq.