European, US Stocks Fall After Housing Data Drop

LOUISE WATT

LONDON (AP) — European and U.S. stocks slid Wednesday after data showed the number of new home sales in the world's largest economy unexpectedly dropped last month, stoking fears about the pace of a potential economic recovery.

Britain's FTSE 100 closed down 2.3 percent at 5,080.42, Germany's DAX shed 2.5 percent to 5,496.27 and France's CAC 40 lost 2.1 percent at 3,663.78.

In midday trading in New York, the Dow Jones industrial average index slipped 0.6 percent to 9,827 and the Standard & Poor's 500 index was 1.3 percent lower at 1,049.84.

Major Asian markets fell by about 1.5 percent or more following weakness in the U.S. on Tuesday after a disappointing report on consumer confidence in the world's largest economy.

A U.S. government report Wednesday showed sales of new homes dropped in September as the effects of a soon-to-expire tax credit for first-time owners started to wane. Sales fell 3.6 percent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists had expected a pace of 440,000. It was the first decline since March.