* S&P 500 falls below 50-day moving average
* Dow drops more than 200 points, Nasdaq below 3,000
* VIX up eight days in a row, longest streak in 9 years
* Apple briefly tops $600 bln market capitalization
* Dow down 1.6 pct, S&P off 1.5 pct, Nasdaq off 1.6 pct
By Ryan Vlastelica
NEW YORK, April 10 U.S. stocks fell in a broad
and steep decline on Tuesday, with the S&P 500 dropping for a
fifth day to break under a key support level.
The industrial and materials sectors represented the stocks
suffering the biggest drops. More than four-fifths of the stocks
traded on the New York Stock Exchange slid, while about 80
percent of Nasdaq-listed shares declined.
The three major U.S. stock indexes fell more than 1 percent
in midday trading, with the S&P 500 sliding below its 50-day
moving average of 1,372.30. That area is viewed as the support
level that will make or break the current uptrend as Wall Street
enters the first-quarter earnings season.
"Dropping below that level suggests a loss of momentum, and
it looks pretty widespread," said Katie Stockton, chief market
technician at MKM Partners in Greenwich, Connecticut, who added
that the S&P 500 could fall down to about 1,350.
The CBOE Volatility Index surged 10.4 percent to
20.77, and was up for the eighth straight day, its longest
streak of consecutive gains in nearly nine years. At its session
high, the VIX touched 20.98 - up 11.5 percent for the day.
Dow component Alcoa Inc, a bellwether for the
industrial sector, will kick off the quarterly earnings season
after the closing bell when it releases its results. Alcoa's
stock fell 2.6 percent to $9.35.
"I like the fact that we're pulling back ahead of earnings.
That gives more room to the upside for positive reactions,"
Apple shares dropped quickly from hitting a new
high of $644 per share to briefly top a $600 billion market
capitalization. Its stock later fell 1.1 percent to $629.36.
The Dow Jones industrial average was down 202.76
points, or 1.57 percent, at 12,726.83. The Standard & Poor's 500
Index was down 20.50 points, or 1.48 percent, at
1,361.70. The Nasdaq Composite Index was down 49.84
points, or 1.64 percent, at 2,997.24.
The Nasdaq also fell below its 50-day moving average of
If the Nasdaq ends near that level or lower, it will be its
first close below 3,000 since March 12.
The Standard & Poor's 500 Index is still up 8.1 percent so
far this year - compared with its gain of 12 percent at the end
of the first quarter. But the benchmark index has fallen 2.6
percent in the past four sessions as investors questioned the
economy's strength and the U.S. Federal Reserve's resolve to
keep the easy money flooding into the market.
Some analysts view the pullback as a buying opportunity,
while others see it as the start of a long-awaited correction.
"We've had a really strong run and we've needed a
correction, so it makes sense for people to take profits off the
table," said Weyman Gong, chief investment strategist at
Signature in Norfolk, Virginia, which has $2.5 billion in assets
under management. "Still, if we go down further, we might use
that as an opportunity to add exposure."
Friday's soft U.S. payrolls report added to the U.S. stock
market's recent losses that were sparked by last Tuesday's
minutes from the Fed's March policy meeting. The Fed's minutes
were interpreted as showing the central bank was less than keen
to launch more stimulus.
A Reuters poll on Monday showed most major Wall Street banks
expect anemic growth in the U.S. job market and a struggling
economic recovery to force the Fed to undertake another round of
Supervalu Inc shares jumped 12.8 percent to $6.00
after the third-largest U.S. supermarket operator reported
better-than-expected earnings and issued a full-year profit
forecast above Wall Street's view.
Best Buy shares hit their lowest since December 2008
and were at their session low after Chief Executive Brian Dunn
resigned after 28 years with the world's largest consumer
electronics retail chain. The stock was down 4.1 percent at