Wall Street tumbled for the second consecutive day following a disappointing read on housing data and a fall in commodity prices. Slides were broad-based as G-20 summit began in Pittsburgh.
In economic news, according to a report existing home sales fell from a 5.24 million unit rate in July to a seasonally adjusted 5.1 million unit rate in August. Economists forecast for an increase to 5.3 million.
Meanwhile, a Labor Department report revealed new claims for unemployment dropped from 551,000 the previous week to 530,000 last week. Forecasts were for a rise of 5,000.
Continuing claims unexpectedly fell from 6,261,000 to 6,138,000.
The Dow Jones weakened 41.11 points, or 0.42%, to 9,707.44, the S&P's 500 lost 10.09 points, or 0.95%, to 1,050.78 and the NASDAQ slipped 23.81 points, or 1.12%, to 2,107.61.
Financials were heavily sold as the Federal reserve said it would scale back short-term cash auctions early next year. Morgan Stanley slumped 4.1%, while Bank of America and Citigroup were the next worse off with drops of 3% and 2%.
JPMorgan and Wells Fargo fell 1.5% and 1.1%.
Conglomerate General Electric shed 2.5%, while diversified media company News Corp lost 2%.
Microsoft added 0.9% as it dismissed rumours it was in talks to purchase Electronic Arts. The video game publisher’s shares slid 2.7%.
Home builders Lennar and Toll Brothers shed 4.5% and 2.3% on the housing data.
Airline manufacturer Boeing dropped 1.1%, while global security company Lockheed Martin fell 2.4%.
Aluminium producer Alcoa sank 4.5%, while machinery manufacturers Caterpillar and Deere & Co shed 2.4% and 2.1%.
Energy stocks ConocoPhillips, Chevron and Exxon Mobil lost 1.7%, 0.9% and 0.1% respectively.
NYMEX light crude oil for October delivery fell US$3.08 to settle at US$65.98 a barrel.
COMEX gold for December delivery fell US$15.50 to settle at US$998.90 an ounce.
European Markets
European stocks lost the most ground in a single session in a month. Financials and commodity stocks were the major drags.
The UK benchmark FTSE 100 shed 60.10, or 1.17% to 5,079.27. The French CAC40 lost 63.43, or 1.66% to 3,758.36, while the German DAX fell 96.84, or 1.70% to 5,605.21.
Financials weakened after major world central banks said they planned to cut back large injections of US dollars into their banking systems. Standard Chartered shed 2.5%, while UK peers Barclays and Lloyds lost 1.8% and 1.7%.
BNP Paribas fell 1.5% as Commerzbank and Deutsche Bank dipped 3.3% and 2.8%.
Insurer Allianz dropped 3.9%, while AXA and Prudential slid 1.3% each.
Energy majors Total and BG Group dropped 3.4% each as the price of crude slumped. BP retreated 1.2%.
Weaker metals prices sent mining stocks lower. Xstrata, Anglo American and Antofagasta shed 2.7%, 2% and 1.8% respectively.
BHP Billiton and Rio Tinto lost 1.9% and 2.1%.
Air France fell 3.5% following a broker “sell” recommendation, while British Airways slumped 4.3% on the back of a broker downgrade.
Japanese Markets
The Nikkei 225 made strong gains Thursday, its first day trading for the week after a string of Japanese public holidays. The banks fell, while other stocks stoked the market following a bullish review from analysts.
The Nikkei 225 added 173.68, or 1.67% to 10,544.22.
Heavyweight Japanese bank Mizuho Financial Group slumped 5.2%, after speculation loan repayments to the bank could be delayed.
Rival bank Sumitomo Mitsui Financial Group lost 3.8%. Mitsubishi UFJ Financial Group eased a more modest 0.4%.
Consumer lender Aiful slumped a massive 23.9%, continuing a string of damming price slides.
Chip maker Toshiba added 3.8% on a broker upgrade, while retailer Fast Retailing spiked 5.3% for the same reason.
Kyocera rose 4.5%, while automaker Honda put on 1.6%.
Sony added 3.1%. The consumer electronic producer said its Playstation game console was selling well.
Japan Air Lines slumped 15.8% after reports surfaced the carrier may be split up.
Hong Kong Markets
The Hang Seng lost ground Thursday, with significant losses recorded by the shippers, miners and the banks. A combination of new IPO’s and the perception of an overheated market prompted the sell-off.
The Hang Seng retreated 544.79, or 2.52% to 21,050.73.
HSBC lost 2.3%, while Bank of China and Bank of Communications lost 4% and 4.1% respectively.
And in a demonstration that not all IPO’s are paved with gold Metallurgical Corp. of China finished the day lower.
Falling oil and commodity prices prompted a sell-off in Petrochina and Jiangxi Copper, which shed 3% and 3.6% respectively.
Chinalco split them with a 3.4%.
Checking back in with the shippers, China Cosco Holdings and Pacific Basin Shipping shed 3.1% and 2% respectively.
The Baltic Dry Index has shed more than 12.7% in the last 9 days.
