NEW YORK — A stronger dollar and a surprise interest-rate hike in China that might slow that country’s economy helped push stocks sharply lower Tuesday.
The Dow Jones industrial average fell below 11,000 for the first time in a little more than a week, reversing a streak that had pushed the index up nearly 7 percent for the year. It was the largest single-day drop in the market since early August.
Bank of America Corp.’s 4.4 percent drop was the largest fall in the Dow and came amid reports that a group of investors including BlackRock Inc. and Pacific Investment Management Co. are reportedly attempting to force the bank to repurchase mortgages put out by Countrywide Financial Corp., which Bank of America bought in 2008. BlackRock and Pimco declined to comment.
The broader stock market fell after an announcement that China, whose rapid growth has helped pull the global economy along, raised a key interest rate to fight inflation. That pushed the shares of U.S. companies down, many of which consider China an important market.
The Dow Jones industrial average fell 165.07, or 1.5 percent, to 10,978.62. The Standard & Poor’s 500 index fell 18.81, or 1.6 percent, to 1,165.90, while the Nasdaq composite index fell 43.71, or 1.8 percent, to 2,436.95.
Earlier in the day, disappointing news from Apple Inc. and IBM Corp. helped send the technology-heavy Nasdaq down about 2 percent. Both companies beat earnings forecasts when they reported results late Monday, but each delivered news that investors didn’t like. Apple Inc. didn’t sell as many iPads as analysts had hoped, and a measure of profitability was lower than expected. IBM Corp.’s outsourcing business didn’t do as well as analysts had predicted.
“On average, the earnings reports have beaten expectations, but now investors are asking, ‘What’s next?’ ” said Jonathan Satovsky, the head of Satovsky Asset Management.
The dollar rose 1.7 percent against a basket of currencies, while gold fell 2 percent.
The strengthening dollar led to a broad sell-off of commodities.
