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Stocks Drop 2% on Global Slowdown Fears

In addition, the National Association of Realtors said that U.S. existing home sales fell 1.5% to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April. Economists surveyed by expected existing home sales to fall to a 4.5 million annual rate.

Lawrence Yun, chief economist at NAR, said inventory shortages in certain areas have been building all year. "The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand. The normal seasonal upturn in inventory did not occur this spring," he said. "Even with the monthly decline, home sales have moved markedly higher with 11 consecutive months of gains over the same month a year earlier."

The Federal Housing Finance Agency's housing price index rose 0.8% on a seasonally adjusted basis in April. The previously reported 1.8% increase in March was revised downward to reflect a 1.6% increase.

August crude oil futures dropped $3.25 to settle at $78.20 a barrel. August gold futures shed $50.3 to settle at $1,565.50 an ounce.

The benchmark 10-year Treasury jumped 13/32, diluting the yield to 1.620%, while the greenback rose 1.06% according to the dollar index.

In corporate news, Rite Aid (RAD) reported first-quarter earnings that met analysts' expectations but it lowered its sales guidance for the year.

The drugstore chain reported a first-quarter loss of $30.7 million, or 3 cents a share, narrower than a year-earlier loss of $65.5 million, or 7 cents a share. Shares gained nearly 7%.

Red Hat (RHT) beat Wall Street's first-quarter profit expectations but it posted weak billings and provided second-quarter guidance slightly below estimates. The stock sank roughly 6%.

Shares of Bed Bath & Beyond (BBBY) tanked after the specialty retailer gave a disappointing outlook on Wednesday for its fiscal second quarter. The Union, N.J.-based company said it expects earnings of 97 cents to $1.03 a share in the three months ending in August, below analysts' expectations of a profit of $1.08 a share. Shares plunged 17%.

Burger King Worldwide (BKW) shares rose 2.6% as the company returned to the New York Stock Exchange. The fast food giant priced its IPO at $14.50 and closed the session at $15.40.

Shares of Celgene (CELG - Get Report) dived 11.5% after the drug company withdrew its application for the approval of blood cancer drug Revlimid for maintenance usage.

Meanwhile Onyx Pharmaceuticals (ONXX) shares soared 43% after its blood cancer treatment carfilzomib garnered very positive assessments from a Food and Drug Administration panel.

-- Written by Andrea Tse and Shanthi Bharatwaj in New York.

>To contact the writer of this article, click here: Andrea Tse.
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