* Lockhart: Fed's QE tapering could come as early as
* Stocks coming off lightest full trading day of 2013
* IBM, Dow's biggest decliner, falls after Credit Suisse
* Dow off 0.7 pct, S&P 500 down 0.6 pct, Nasdaq down 0.7 pct
By Angela Moon
NEW YORK, Aug 6 U.S. stocks slid to session lows
on Tuesday following comments from Dennis Lockhart president of
the Atlanta Federal Reserve Bank, that the central bank could
start reducing its bond-buying program as soon as September.
The selloff accelerated in late morning after Lockhart, in
an interview with Market News International that was picked up
by a Wall Street Journal blog, said that while the Fed's easing
back on monetary stimulus could come in September, the move
could come at any time before the end of the year.
"It's almost as if the market was looking for an excuse to
sell, and they found that from Lockhart's comments. It's nothing
new, but at these levels, any news from the Fed could serve as a
good reason to book profits," said Ryan Detrick, senior
strategist at Schaeffer's Investment Research in Cincinnati.
The steep downturn, which drove the three major U.S. stock
indexes down to session lows with the Nasdaq briefly down 1
percent, took place around 11 a.m., a Thomson Reuters chart
showed. This move extended declines linked to investors taking
profits from the recent rally that lifted the Dow Jones
industrial average and the S&P 500 to back-to-back record highs
late last week.
The market's swings were exaggerated by thin trading volume,
which was light for the second consecutive day. Monday marked
the lowest volume for a full-day session so far this year. With
major U.S. economic data like the nonfarm payrolls report and
earnings from bellwethers out of the way, volume is expected to
be light throughout the week.
The Dow Jones industrial average was down 104.05
points, or 0.67 percent, at 15,508.08. The Standard & Poor's 500
Index was down 10.21 points, or 0.60 percent, at
1,696.93. The Nasdaq Composite Index was down 27.06
points, or 0.73 percent, at 3,665.89.
Earlier, the Dow fell as low as 15,473.40, while the S&P 500
touched a session low of 1,693.29, and the Nasdaq hit an
intraday low of 3,654.67.
The S&P 500 has risen for five of the past six weeks,
gaining more than 7 percent over that period. Both the Dow and
the S&P_ 500 closed at all-time highs on Friday - for the second
day in a row. The S&P's 50-day moving average, now at 1,692.77,
could serve as a support level in any market decline.
Retailers' shares were among the day's biggest losers.
American Eagle Outfitters shares plunged 15.1 percent to
$16.95 a day after the retailer said its second-quarter profit
would be hurt by weak sales and margins. A number of analysts
downgraded the stock.
The stock fell to a 52-week low of $16.60 and gave investors
a reason to unload the shares of other retailers that cater to
teens and young adults. Urban Outfitters shares fell
3.5 percent to $42.14 and Aeropostale dropped 5.3
percent to $14.16. Gap Inc declined 2.4 percent to
$45.18. Abercrombie & Fitch slid 5.5 percent to $48.80.
The Dow's worst performer was International Business
Machines Corp, down 2.2 percent at $191.15, after Credit
Suisse cut its rating on the stock to "underperform" from
"neutral," saying organic growth would be challenging in the
future. Credit Suisse also cut its price target on the Dow
component by $25 to $175.
Cognizant Technology Solutions Corp shares shot up
3.2 percent to $75.77 after the company reported a 20 percent
rise in second-quarter revenue. Fossil Group Inc shares
surged 18.3 percent to $127.03 after its results.
Of the 391 companies in the S&P 500 that reported earnings
for the second quarter through Monday, 67.8 percent have topped
analysts' expectations, in line with the average beat over the
past four quarters, data from Thomson Reuters showed. About 55
percent have reported revenue above estimates, more than in the
past four quarters but below the historical average.
The Washington Post Co shares jumped 4.2 percent to
$592.76 after Amazon Inc founder Jeff Bezos agreed to
buy the publishing company's newspaper assets for $250 million.
Earlier, the stock touched a 52-week high at
In another look at the economy, the Commerce Department said
the U.S. trade deficit narrowed sharply in June to its lowest
level in more than 3-1/2 years as imports reversed the previous
month's spike, suggesting an upward revision to second-quarter
growth. The gap narrowed to $34.2 billion, compared with
expectations of $43.5 billion.