Dow falls 203 in worst drop this year

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Traders worked on the floor at the New York Stock Exchange on Tuesday. Stocks suffered their biggest losses of the year  after a steady rally began in January.  SETH WENIG/ASSOCIATED PRESS
SETH WENIG/ASSOCIATED PRESS
Traders worked on the floor at the New York Stock Exchange on Tuesday. Stocks suffered their biggest losses of the year after a steady rally began in January.

Stocks suffered their biggest losses in three months Tuesday, the first hiccup in a strong and steady rally to start the year. Wall Street worried about the global economy and waited while Greece pressured the last investors to sign on for its bailout.

The Dow Jones industrial average fell more than 200 points, giving up more than a quarter of its 745-point advance since Jan. 1, the best start to a year in the U.S. market since 1998.

The sell-off, which spread west from Europe, also interrupted a period of unusual calm on Wall Street. Before Tuesday, the Dow had not fallen 100 points for 45 straight trading sessions, the longest streak since 2006.

The decline of 203.66 points was the worst for the Dow since Nov. 23 and left the average at 12,759.15. It was only last week that the Dow closed above 13,000 for the first time since May 2008, four months before the worst of the financial crisis.

“When things go straight up and don’t ever correct or have some sort of normal pullback, as an investor, that makes me nervous,” said Ed Hyland, a global investment specialist with J.P. Morgan Private Bank.

Stocks fell sharply from the opening bell and never mounted a serious comeback. The Dow was down as much as 227 points. All but one of the 30 stocks in the average finished the day lower. Intel managed a gain of 7 cents.

All 10 industry groups in the Standard & Poor’s 500 declined. The S&P’s 500 index fell 20.97 points, its worst decline since Dec. 8, to 1,343.36. The S&P had not declined 1 percent or more for 45 straight trading days, also the longest streak since 2006.

The Nasdaq composite index dropped 40.16 points to 2,910.32. The Nasdaq last week broke through 3,000 for the first time since December 2000.

Last year, sell-offs like this were much more common. The S&P fell by at least 1 percent on 48 trading days, roughly one in every five.

During the depths of the financial crisis in the last four months of 2008, it happened roughly one in every three days.

AT A GLANCE

WHAT HAPPENED: The biggest down day for stocks in three months.

BY THE NUMBERS: Of 30 Dow stocks, 29 declined. All 10 sectors of the S&P 500 declined. Dropping stocks outnumbered those that advanced by 10-to-1.

WHAT’S NEXT: Thursday is an important deadline as Greece seeks its next bailout. Friday brings a closely watched update to the U.S. unemployment rate.

– Associated Press


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