Falling home prices and consumer confidence sent stocks plunging on Tuesday, evidence that fears of a crippling credit crunch remain front and center for investors.
Selling worsened after the afternoon release of Federal Reserve meeting minutes that showed the Fed remains hawkish on inflation, but the minutes were from August 7, 10 days before the Fed cut its discount lending rate in a surprise move. Still, the minutes were enough to worry investors that the Fed won’t be responsive enough to stem the spreading mortgage market meltdown.
The news also means that traders will be watching a speech by Fed Chairman Ben Bernanke Friday for evidence that central bankers are softening their stance.
Among Nasdaq most actives, Apple , Research in Motion
and Nvidia
posted the biggest declines, down 4% or more.
Earthlink gained 7% on a restructuring plan.
After the close, Seagate raised guidance and Google
announced that its CFO is retiring.
The Nasdaq fell 60 to 2500, the S&P 500 fell 34 to 1432, and the Dow plunged 280 to 13,041. Volume rose to 2.9 billion shares on the NYSE, and 1.61 billion on the Nasdaq. Declining issues led by a 28-4 margin on the NYSE, and 24-6 on the Nasdaq. Downside volume was 94% on the NYSE, and 90% on the Nasdaq. New highs-new lows were 17-75 on the NYSE, and 41-75 on the Nasdaq.