Wall Street stocks fell on Tuesday, with each of the major indexes notching their worst day in about a month as economic data and weaker-than-expected auto sales spurred concerns about growth.
Shares of Ford and General Motors dropped more than 4 per cent each after the two major US automakers reported July vehicle sales slightly below expectations.
The automakers’ declines pulled the S&P consumer discretionary sector down 1.5 per cent as the worst-performing of the 10 major S&P groups.
Data showed US consumer spending rose more than expected in June as households bought a range of goods and services.
However, personal income rose only 0.2 per cent, missing estimates of 0.3 percent, while inflation remained below the Federal Reserve’s 2 per cent target. That could keep the central bank on a cautious path to hiking interest rates.
“People are starting to see that things aren’t quite as rosy as they might have thought in the month of July with that big run up,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. The S&P 500 climbed 3.6 percent in July, its best month since March.
Another drop in US crude below $40 a barrel also weighed on sentiment, as the commodity settled down 1.4 per cent at $39.51.
Pfizer, was the biggest percentage decliner on the Dow, after the largest US drugmaker reported better-than-expected quarterly results but revenue from its branded patent-protected medicines was disappointing.
The Dow Jones industrial average fell 90.74 points, or 0.49 per cent, to 18,313.77, the S&P 500 lost 13.81 points, or 0.64 per cent, to 2,157.03 and the Nasdaq Composite dropped 46.46 points, or 0.9 percent, to 5,137.73.
CVS jumped more than 5 percent to $98.57 after the drugstore chain operator’s quarterly profit beat estimates.
Of the 353 companies in the S&P 500 that have reported earnings through Tuesday morning, 71 per cent have topped analyst expectations, according to Thomson Reuters data.
Earnings for the second quarter are expected to show a decline of 2.6 per cent, an improvement from the expected 4.5 per cent decline on July 1.
Equities pared early losses after a report in the Wall Street Journal that biotechnology giant Biogen Inc has drawn takeover interest from drug companies, including Merck & Co Inc and Allergan Plc. Biogen shares surged 9.4 per cent to $330.11 and the Nasdaq biotechnology index climbed 0.2 per cent after falling as much as 1.8 per cent.
Declining issues outnumbered advancing ones on the NYSE by a 3.35-to-1 ratio; on Nasdaq, a 2.97-to-1 ratio favoured decliners.
The S&P 500 posted 14 new 52-week highs and 1 new low; the Nasdaq Composite recorded 54 new highs and 38 new lows.
About 7.45 billion shares changed hands on US exchanges, compared with the 6.64 billion daily average over the last 20 sessions.