Wall Street posts worst day since November 7 on gold's drop, Boston blasts

NEW YORK Mon Apr 15, 2013 6:16pm EDT

1 of 2. Traders work on the floor at the New York Stock Exchange, April 11, 2013.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - Stocks posted their worst day since November 7 on Monday as big declines in the price of gold, oil and other commodities fed a broad selloff in equities.

Weaker-than-expected data from China sparked the initial decline, but selling accelerated late in the session as reports of two explosions in Boston near the finish line of the Boston Marathon unnerved investors.

Commodity-related shares led stocks' losses, with gold suffering its worst two-day sell-off in 30 years as the China data fueled worries about the strength of the global economy. The SPDR Gold Shares ETF (GLD.P) lost 8.8 percent to $131.31 on record volume.

Total trading volume was the second highest of the year, with about 8.5 billion shares changing hands on U.S. exchanges.

Analysts said the stock market had been vulnerable to a pullback, given the sharp gains since the start of the year as well as the Dow's and the S&P 500's recent record highs. The S&P 500 is still up 8.8 percent for the year.

"I don't think the market has much tolerance for bad news," said Uri Landesman, president of Platinum Partners in New York.

"There was a bad Chinese GDP number, which I think spooked people to start, and technical factors. Profit-taking started taking over. Late in the day, we were getting hit by reports that there were explosions in Boston. That gets people nervous."

At least two were killed and dozens were injured from the blasts.

The Dow Jones industrial average .DJI sank 265.86 points, or 1.79 percent, to close at 14,599.20. The Standard & Poor's 500 Index .SPX fell 36.49 points, or 2.30 percent, to 1,552.36. The Nasdaq Composite Index .IXIC lost 78.46 points, or 2.38 percent, to end at 3,216.49.

It was the biggest daily percentage drop for all three indexes since November 7, when the market sold off following the U.S. presidential election.

The biggest declining sectors were energy and materials. The S&P energy sector index .SPNY lost 3.9 percent. The S&P materials sector index .SPLRCM also fell 3.9 percent.

Exxon Mobil (XOM.N) fell 2.8 percent to $86.49 and led the S&P 500's decline, while shares of miner Freeport-McMoRan Copper & Gold Inc (FCX.N) tumbled 8.3 percent to $29.27.

Data showed China's annual rate of growth eased back to 7.7 percent from the 7.9 percent rate of the previous quarter and below economists' forecast for an 8.0 percent expansion.

"The adverse feedback loop of all these things, particularly margin calls perhaps with gold, that's spilling over to stocks, and that's something most investors don't want to get in front of, so we've seen selling really dominate the day today," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

The CBOE Gold ETF Volatility Index .GVZ, which measures the market's expectation of 30-day volatility of gold prices by applying the VIX methodology to options on SPDR Gold Shares, shot up 61.7 percent - its largest percentage gain in its history. The index, often called the Gold VIX, hit a fresh 52-week high at 35.39. <ID:L2N0D21XC>

Other stock decliners included Dish Network (DISH.O), which fell 2.3 percent to $36.77 after the No. 2 U.S. satellite television provider offered to buy Sprint Nextel Corp (S.N) for $25.5 billion in cash and stock. Sprint shares jumped 13.5 percent to $7.06.

The offer could thwart the proposed acquisition of Sprint by Japan's SoftBank Corp (9984.T).

Among the day's gainers, Citigroup (C.N) shares edged up 0.2 percent to $44.87 after reporting a higher-than-expected gain of 31 percent in first-quarter profit.

First-quarter reports are expected to show only a small year-over-year gain in overall earnings since growth has slowed in recent quarters. S&P 500 earnings growth is estimated at 1.7 percent, based on results from 34 companies that have reported results so far and estimates for the rest, Thomson Reuters data showed.

Decliners outnumbered advancers by a ratio of more than 7 to 1 on both the NYSE and the Nasdaq.

(Additional reporting by Leah Schnurr and Doris Frankel; Editing by Kenneth Barry, Nick Zieminski and Jan Paschal)

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Comments (12)
irisbrock wrote:
Let me see if I understood well. Few months ago China announced their plan to slow growth to 7.5% per year. Was the 7.7% announced lower? Stop BS.

Apr 15, 2013 7:39am EDT  --  Report as abuse
Handbook wrote:
Well of course “NY readings came in below expectations”. What else would you expect from one of the most politicized, unionized and corrupt areas of the country. Businesses have been leaving the region in droves for decades. The only thing left is government, regulated industries and Wall Street.

Apr 15, 2013 9:10am EDT  --  Report as abuse
Crash866 wrote:
Surprise!! Who woulda thunk it?!?! You voted for this!!

Apr 15, 2013 10:22am EDT  --  Report as abuse
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