(Updates to midday)
By Ellis Mnyandu
NEW YORK, July 26 (Reuters) - U.S. stocks tumbled on Thursday on signs of further deterioration in the U.S. housing market, a jump in oil prices and a worsening climate for financing corporate takeovers.
The broad Standard & Poor’s 500 stock index fell 2 percent at one point, and the steep decline led the New York Stock Exchange to impose trading curbs which restrict large-block sales when a stock was falling.
The slump was worldwide, with overnight equity losses in Asia and the worst drop in European shares in more than four months. U.S. Treasuries rallied, meanwhile, on a flight to safety.
“Housing basically seems to be a bust,” said Stephen Carl, principal and head of U.S. equity trading at The Williams Capital Group LP in New York. “The economic numbers we’re seeing are not strong at all. Oil is also not going to help.”
The Dow Jones industrial average .DJI was down 210.70 points, or 1.53 percent, at 13,574.37. The Standard & Poor's 500 Index .SPX was down 28.01 points, or 1.85 percent, at 1,490.08. The Nasdaq Composite Index .IXIC was down 44.15 points, or 1.67 percent, at 2,604.02.
Disappointing quarterly earnings from Exxon Mobil Corp. (XOM.N) hurt the energy sector and wiped out more than $16 billion in Exxon’s market value as the stock slid 4 percent.
Financial shares also took a beating on concern that contagion from battered subprime mortgage market will grow. Adverse credit market conditions also were spilling over into the financing of corporate deals, which have helped to drive stocks to recent record highs.
In addition, a government report showed a sharper-than-expected drop in June new home sales, while home builder WCI Communities Inc. WCI.N said the real estate market downturn was hurting its push to sell itself. The stock fell 21 percent to $8.91 on the NYSE.
Exxon was the biggest decliner on both the Dow and the S&P 500. Its stock dropped to $87.77 on the New York Stock Exchange.
JPMorgan Chase & Co (JPM.N) dropped 3.3 percent to $43.80 and Citigroup Inc (C.N) down more than 3 percent. The bank’s index .BKX dropped 2.6 percent. A bank shares index .BKX fell to the lowest level since July 2006.
Shares of Beazer Homes dropped 6.4 percent to $15.94 on the NYSE, while D.R. Horton shares fell 5.2 percent to $16.57.
The Dow Jones home construction index .DJUSHB was down 4.5 percent.