Updated from 4:21 p.m. EDT
U.S. stocks limped into the close after taking a merciless beating throughout the session as investors were dealt more data on a slumping housing market that only seemed to be getting worse.
Dow Jones Industrial Average
got crushed, ending the session down 283.1 points, or 2.4%, at 11,349.28, while the
dropped 29.65 points, or 2.3%, to close at 1252.54. The
gave up 45.77 points, or 2%, to 2280.11.
The National Association of Realtors reported that existing-home sales declined 2.6% in June to a seasonally adjusted annual rate of 4.86 million units, falling short of economists' expectations for 4.95 million units. Median single-family home prices fell 6.1% year over year in June.
"We still think home sales have some way yet to fall, but they are not going to keep dropping at the June pace," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics, in an email. He predicted further price drops for U.S. homes.
"The market cannot heal until the housing market heals," said Michael Pento, senior market strategist for Delta Global Advisors. He said that rates of homeownership in the U.S. are well above historical norms, so there isn't demand for houses. Furthermore, home-to-price ratios are too high, meaning homes are overvalued in historical terms.
The financial sector suffered following the report, as concern mounted over the possibility of additional mortgage-related losses for the banks. Dow members
were all contributing to the index's decline. "Assets held by banks will continue to erode, so I'm not very ebullient on the banking sector," said Pento. Citigroup dropped 9.8% to $19.06, AIG fell 8.9% to $27.43 and JPMorgan lost 5.9% to $39.49.
The Labor Department also released jobless claims for the week ended July 19. Initial claims were up 34,000 to 406,000 for the week, and the July 12 figure was revised to 372,000 from 366,000.
"We had the first-time jobless claims well over 400,000 for the first time since 2005," said Pento. "The economy is weak. We're not looking at any second-half rebound."
The downdraft in stocks came as traders sorted through another slew of corporate quarterly reports.
Following the close of Wednesday's trading, online merchant
on both the top and bottom lines. Shares jumped 12% to $78.72.
Elsewhere in technology, chipmaker
despite a decline in third-quarter profit. Qualcomm also
with cell-phone maker
, sending shares up 17% to $52.43.
posted a loss that was worse than its year-ago results, while
narrowed its own loss. Ryland got hammered down 20% to $21.14, and Pulte dropped 14% to $11.03.
Before Thursday's trading got underway, investors heard quarterly results from another heap of companies.
reported a 27% drop in profit on rising energy and materials costs. Shares edged down 3.3% to $33.11.
Farm products maker
and fertilizer seller
, on the other hand, both recorded soaring profits. Nevertheless, Bunge shed 2.3% to $97.07, and Potash was down 3.3% to $194.
In the pharmaceutical space,
cut its second-quarter loss in half on improving sales of its multiple-sclerosis drug Tysabri.
announced a 44% increase in second-quarter income, but reduced its full-year earnings outlook.
likewise saw profits soar on strong sales of its Revlimid blood cancer treatment. Elan slipped 3.6% to $32.34, Lilly added 0.8% to $48, and Celgene climbed 4% to $73.26.
posted a wider-than-expected loss of $8.7 billion on waning demand for its heavy vehicles and hefty impairment charges, dropping the stock 15% to $5.11.
saw second-quarter earnings decline 10% on increasing natural gas, oil and distribution costs. Shares went 2.4% lower to $55.35.
said it swung to a $1.8 billion loss thanks to an increase in loan-loss reserves and $1.1 billion in writedowns. The stock edged down less than 1% to $4.67.
On the other hand,
saw earnings fall 62% year over year but nonetheless beat Wall Street estimates. The stock ticked up 2.4% to $49.11.
The Wall Street Journal
reported that Kevin Johnson, head of
Windows and online services segments, will
In pursuit of a merger,
XM Satellite Radio
said they will pay a $19.7 million penalty to settle Federal Communications Commission rules violations, a move that may push the deal forward.
New York Attorney General Andrew Cuomo sued Swiss bank
for allegedly understating the risks involved in auction-rate securities.
Moving over to commodities, crude oil gained $1.05 to close at $125.49 a barrel after falling nearly $7 over the past two days. Gold fell 80 cents to settle at $922.
Treasuries were edging higher. The 10-year note was up 27/32 in price to yield 4.01%, and the 30-year was adding 28/32, yielding 4.62%. The dollar was falling against the euro, the yen and the pound.
Overseas, European exchanges were trading downward. The FTSE in London and the DAX in Frankfurt were both weaker. In Asia, Japan's Nikkei gained, while Hong Kong's Hang Seng declined.