* S&P 500, Nasdaq fall below 50-day moving average
* VIX up eight days in a row, longest streak in 9 years
* Alcoa shares rise in extended trading after results
* Apple briefly tops $600 bln market cap before falling
* Dow down 1.7 pct, S&P off 1.7 pct, Nasdaq off 1.8 pct
By Ryan Vlastelica
NEW YORK, April 10 The selloff in U.S. stocks
accelerated on Tuesday, as the Dow and S&P 500 dropped for a
fifth day, with the pullback coming on the cusp of earnings
The slide marked the S&P 500's worst day since Dec. 8. The
declines were the largest losses this year in terms of both
points and percentage drops for each of the three major U.S.
All S&P 500 sectors ended solidly lower, with industrial and
materials names suffering the biggest drops. About 80 percent of
shares listed on the New York Stock Exchange and the Nasdaq
Stock Market ended lower.
The major U.S. stock indexes each fell more than 1.5
percent, pushing the S&P 500 below its 50-day moving average of
1,372.30, an area viewed as a significant support level that
will make or break the current uptrend.
"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 to about 1,350 before finding a new
level of support.
The Nasdaq also slid below its 50-day moving average and
closed below 3,000 for the first time since March 12.
Concerns about European debt have resurfaced and could be a
catalyst for further declines as the yields on riskier Italian
and Spanish debt climbed. U.S.-listed shares of Banco Santander
fell 3 percent to $6.51.
Dow component Alcoa Inc climbed 5.4 percent to $9.82
in extended trading after the aluminum maker reported its
With 5 percent of the S&P 500 components having already
reported, profits are seen rising 3.1 percent in the quarter,
according to the Thomson Reuters Director's Report.
"We've clearly seen a major slowdown in earnings, which are
dependent on global growth now that profit margins have stopped
expanding, and global growth isn't great right now with all the
issues in Europe," said Jim McDonald, chief investment
strategist at Northern Trust Global Investments in Chicago,
which has about $650 billion in assets under management.
The Dow Jones industrial average lost 213.66 points,
or 1.65 percent, to 12,715.93 at the close. The Standard &
Poor's 500 Index dropped 23.61 points, or 1.71 percent,
to 1,358.59. The Nasdaq Composite Index tumbled 55.86
points, or 1.83 percent, to 2,991.22.
Volume was higher than average, with about 8.18 billion
shares traded on the New York Stock Exchange, the American Stock
Exchange and Nasdaq, above last year's daily average of 7.84
The CBOE Volatility Index jumped 8.4 percent to
20.39, 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 21.06 - up almost 12 percent for the day.
The Standard & Poor's 500 Index is still up 8 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 4 percent in the past
five sessions, its worst streak since November, as investors
questioned the economy's strength and the U.S. Federal Reserve's
inclination to keep easy money flooding into the market.
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
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 to trade down 1.2 percent
at $628.44 at the close.
Supervalu Inc shares jumped 15.2 percent to $6.13
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 fell 5.9 percent to $21.32,
not far above the intraday low of $21.21.