Wall Street opens lower on weak retail sales
Key stock gauges sank more than 2% on Wednesday, marking for most of the major indexes their first three-day losing streak since Wall Street’s spring surge began.
Since the latest rally got underway March 10, every other sell-off has lasted just one or two days before buyers retook control of the market.
The bulls stumbled Wednesday over a weak April retail sales report, which hints that those widely sighted “green shoots” in the economy may be withering.
Selling also may have been fueled by a Wall Street Journal article that said the Obama administration was talking about ways to curb executive pay at financial institutions -- even those that haven’t gotten federal aid.
“I think it’s all a little too much for the market to digest right now,” said Ryan Larson, head trader at Voyageur Asset Management in Chicago.
But he noted that trading volume declined this week from last week, implying that there was no mad rush for the exits.
The Dow Jones industrial average slid 184.22 points, or 2.2%, to 8,284.89.
Broader stock indicators sank even more sharply. The Standard & Poor’s 500 index slumped 24.43 points, or 2.7%, to 883.92, while the Nasdaq composite index tumbled 51.73 points, or 3%, to 1,664.19. The Russell 2,000 index of small stocks plunged 4.7%.
In Europe, most markets lost 2% to 3%.
The S&P; and the Nasdaq have fallen three days in a row, a fate the Dow avoided with a 50-point gain Tuesday.
The three-day decline left the S&P; down 4.9% since Friday.
With the S&P; index up 37% through Friday from the 12-year low reached March 9, many analysts figured a significant bout of profit-taking was overdue.
“If we give back 10%, that’s probably OK,” Larson said.
The fear, he said, is that a 10% pullback could quickly turn into something much worse, given how nervous many investors remain about the economy and the market.
If buyers don’t come back after this modest decline, “we have a feeling this could slip pretty fast,” Larson said.
--
