Dow Closes Below 10,000, Nasdaq -3.9% on Global Fears

U.S. stocks fell sharply alongside global markets on weak China data, concerns about eurozone debt and falling consumer confidence. Gregg Greenberg has The Real Story.
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NEW YORK (

TheStreet

) -- Stocks plunged Tuesday after a sharp downward revision to China's leading economic indicators and a dismal U.S. consumer confidence reading heightened concerns about the economic recovery. Also weighing on investors' minds were the €442 billion in European bank debt obligations coming due this week.

The

Dow Jones Industrial Average

lost 268 points, or 2.7%, to finish at its second lowest close of the year at 9,870. The

S&P 500

fell 33 points, or 3.1%, to 1041. The mark is the index's most depressed close of 2010, though the index managed to finish just above the technically key 1040 level. The

Nasdaq

tumbled 85 points, or 3.9%, to 2135.

The Conference Board said China's leading economic indicators increased 0.3% in April, compared with a previously reported 1.7% jump. April's mild rise follows 1.2% growth in March and a 0.4% uptick in February.

Also weighing on the Chinese market,

Agricultural Bank of China's

initial public offering saw a lower-than-expected pricing range, according to

The Wall Street Journal

.

European markets fell as investors eyed the €442 billion ($545.5 billion) coming due for banks to the European Central Bank on Thursday. In addition to concerns about whether banks will be able to meet their repayments, investors also worried that debt obligations would leave banks with liquidity shortfalls.

"We had a dark cloud hovering over the market for the last couple of weeks or so and the mood of the market has been decidedly negative," said Jay Suskind, senior vice president at Duncan Williams. "News of slower growth in China followed by that low consumer confidence reading just really pressured the market."

"The market is certainly risk-averse right now with the bond market leading the stock market. The volume isn't large but the buyers are on strike because there's just too much uncertainty out there. We have employment data coming out this week but I've seen such a huge range in estimates that there's certainly a lot of uncertainty there and now we have uncertainty surrounding financial regulation legislation. I keep looking for good news and all I can see is that there isn't a lot of volume so at least this just appears to be a buyers' strike more than anything else."

Suskind said it may take the upcoming earnings season to convince markets that we're not headed for a double-dip.

"It's possible that positive employment data could provide markets with the catalyst they need to move higher but with the long holiday weekend coming, who's going to be around to see it?"

Overseas on Tuesday, Hong Kong's Hang Seng fell 2.3% while Japan's Nikkei slipped 1.3%. The FTSE in London dropped 3.1%, and the DAX in Frankfurt lost 3.3%.

Also on Tuesday,

China and Taiwan signed a trade pact that slashes tariffs, strengthening economic ties and easing political tensions.

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The Economy

Home prices rose 4.6% in April, according to the

S&P/Case-Shiller 20-city home price index. That level outpaced the 3.4% increase that economists had been expecting.

The Conference Board said consumer confidence slumped to a much weaker-than-expected reading of 52.9 in June. Additionally, May's level was downwardly revised to 62.7, from 63.3, as initially reported. Economists had been looking for a June reading of 62.

The U.S.

financial regulatory overhaul could be delayed following the death of Democratic Sen. Robert Byrd on Monday. The House of Representatives is still likely to pass

reform legislation

later Tuesday or Wednesday, but Senate Democrats may not have the 60 votes needed to approve the compromised bill. Sen. Scott Brown (R., Mass.), who offered support to the original legislation, signaled reticence over the latest iteration because of provisions he said create a bank tax.

After the bell, the American Petroleum Institute said inventory levels dropped by 3.4 million barrels last week, according to

Bloomberg.

Analysts were projecting a 1.2 million-barrel decline in crude oil supplies for the week ended June 25, according to a Platts poll.

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Company News

Industrials, financials and materials showed some of the weakest performances of the session on the Dow, as

Boeing

(BA) - Get Report

,

Alcoa

(AA) - Get Report

,

Caterpillar

(CAT) - Get Report

and

American Express

(AXP) - Get Report

put the most pressure on the Dow.

Though all 30 Dow components lost ground today,

Verizon

(VZ) - Get Report

,

Johnson & Johnson

(PG) - Get Report

and

Procter & Gamble

(PG) - Get Report

saw the mildest declines on the the blue chip average, along with

3M

(MMM) - Get Report

.

Verizon shares got help from a

Bloomberg

report saying

Apple's

(AAPL) - Get Report

iPhone could be joining their wireless network in January.

Shares of

Micron

(MU) - Get Report

lost over 13% despite reporting sales that more than doubled on strong memory segment performance.

Tesla Motors'

(TSLA) - Get Report

IPO opened at $19 a share after pricing 13.3 million shares at $17 a share, which was higher than the offering price of $14 to $16 a share. Shares gained over 40% by the end of the session. On Monday, the company increased the number of shares for sale from its original offering of 11.1 million shares.

Shares of

General Mills

(GIS) - Get Report

slipped 1.3% even after the food company raised its quarterly dividend by 12%. Additionally, the company announced a new stock buyback plan. After the bell, General Mills said its fourth-quarter earnings landed in-line with expectations at 41 cents a share, after stripping out certain items, though sales dipped 2%.

Trading on shares of

Citigroup

(C) - Get Report

were briefly halted today after a steep midday drop triggered a circuit breaker.

Teva Pharmaceuticals

(TEVA) - Get Report

said that the Food and Drug Administration approved its generic version of costs of

Pfizer's

(PFE) - Get Report

antidepressant drug Effexor XR.

Google

(GOOG) - Get Report

is trying a different method to allow Chinese users to access its service.

Emerson Electric

(EMR) - Get Report

is reportedly offering a superior counterbid to a Swiss company's offer for British company

Chloride

with a new offer valued at nearly 1 billion pounds, or $1.5 billion, according to

The Associated Press

.

Shares of

Barnes & Noble

(BKS) - Get Report

plunged over 19% after the bookseller reported a wider fourth-quarter loss and foresaw more sluggishness late Monday.

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>>The Economy

>>Commodities and the Dollar

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Commodities and the Dollar

Crude oil for August delivery fell off by $2.31, to settle at $75.94 a barrel.

Elsewhere in commodity markets, the August gold contract traded $3.80 higher to settle at $1,242.40 an ounce.

The

dollar was trading higher against a basket of currencies, with the

dollar index up by 0.5%.

>>Overview

>>The Economy

>>Company News

>>Treasuries

Treasuries

The benchmark 10-year Treasury was up 17/32, diluting the yield to 2.962%.

Yields on the two-year note fell to an all-time low. It was last up 2/32, dropping the yield to 0.605%. The 30-year bond gained 1 6/32, lowering the yield to 3.940%.

--Written by Melinda Peer and Sung Moss in New York

.

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>>The Economy

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