Late Selloff Slams Stocks

Wendy's (WEN Quote) also traded higher after billionaire investor Nelson Peltz said he would be willing to purchase the company for $41 a share. Wendy's finished higher by 4% to $35.03.

As for the economic news, the Commerce Department said personal income rose 0.4% last month, unchanged from May. Personal spending was up 0.1%. Both figures were mostly in line with expectations.

Excluding food and energy, the personal consumption expenditure price index is now higher by 1.9% over the past year, down from a revised 2% in May. That number is within the Federal Reserve's so-called comfort zone range of 1% to 2%.

"As recently as February, the core deflator was up 2.5% year-over-year, so the speed of the decline has been impressive," said Ian Shepherdson, chief economist with High Frequency Economics. "Still, the Federal Reserve is yet to be convinced it is sustainable."

At 10 a.m. EDT, the University of Michigan said its consumer sentiment index for July jumped to a reading of 112.6 from a revised 105.3 the previous month. The latest reading came in well above estimates.

However, the economic docket wasn't void of disappointing data. The Chicago Purchasing Manager Index declined to 53.4 in July from 60.2 in June, coming in short of expectations. Meanwhile, the Commerce Department said construction spending fell 0.3% for June, also below consensus.