U.S. stocks took their biggest loss in almost a month on Tuesday as investors worried about the health of the U.S. economy and sold shares in retailers and car companies. Machinery companies also fell and the price of oil continued to decline.
Travel companies fell after cruise line operator Royal Caribbean cut its projections for the year, and automakers and suppliers fell after car companies reported lower U.S. sales for the month of July. Banks finished lower as investors worried about the health of banks in Europe. While stocks set all-time records as recently as July 22, they’ve been trading in a very narrow range for the last few weeks. Since stocks aren’t making big gains, investors are sensitive to signs of trouble for the U.S. economy, like weaker sales of autos or last week’s disappointing GDP report.
“The market had just rallied… and now it’s sort of paused,” said Jim Paulsen, the chief investment strategist for Wells Capital Management. “Any weak reports get magnified,” he said.
The Dow Jones industrial average fell 90.74 points, or 0.5 percent, to 18,313.77. The Standard & Poor’s 500 index lost 13.81 points, or 0.6 percent, to 2,157.03. The Nasdaq composite slid 46.46 points, or 0.9 percent, to 5,137.73. The Dow has fallen for seven days in a row, and Tuesday was the worst day for U.S. stocks since July 5.
Auto companies reported lower U.S. sales in July as a heatwave kept buyers at home. General Motors said its sales fell 2 percent and Ford said sales fell 3 percent. After six straight years of growth, auto sales have reached record levels and are starting to plateau. GM stock shed $1.37, or 4.4 percent, to $29.93 and Ford lost 54 cents, or 4.3 percent, to $11.94. Car retailers CarMax and AutoNation and supplier BorgWarner all fell.
Tech stocks also lost ground. Apple fell $1.57, or 1.5 percent, to $104.48 and electronic storage company Seagate Technology slid $1.78, or 5.5 percent, to $30.65 despite a solid quarterly report.
Oil prices continued to drop, extending a slide that has lasted more than two weeks. Benchmark U.S. crude fell 55 cents, or 1.4 percent, to $39.51 in New York. U.S. crude hadn’t closed under $40 a barrel since April 8. Brent crude, which is used to price international oils, sank 34 cents to $41.80 a barrel London.
