Investing.com - U.S. stocks closed sharply lower Wednesday as deep seated euro zone worries and new home sales missing estimates weighed on equities.
At the close of U.S. trade, the Dow Jones Industrial Average fell 0.33%, the S&P 500 index plunged 0.57%, while the Nasdaq Composite index collapsed 0.77%.
In a report, the Census Bureau said that new home sales fell to a seasonally adjusted annual rate of 373K, from 374K in the preceding month whose figure was revised up from 372K.
Analysts had expected new home sales to rise to 380K last month.
Earlier, Federal Reserve Bank of Philadelphia President Charles Plosser, a noted inflation hawk, said a decision to roll out a third round of quantitative easing to encourage investing and hiring won't work in that households and businesses would rather pay down debts than take on new leverage.
Quantitative easing functions via pumping liquidity into the financial system in a way that pushes down interest rates across the economy to encourage borrowing.
"And as far as households are concerned, they continue to try to repair their balance sheets in the wake of substantial losses of housing wealth, as I indicated earlier. They are deleveraging and saving more. It seems unlikely that a small drop in interest rates will overturn the strong desire to save and, instead, induce households to spend more," Plosser said in a speech earlier, according to prepared remarks of his presentation.
"Thus, in my view, we are unlikely to see much benefit to growth or to employment from further asset purchases. If I am right, then conveying the idea that such action will have a substantive impact on labor markets and the speed of the recovery risks the Fed’s credibility," Plosser added.
"This is quite costly: If the public loses confidence in the central bank, our ability to set effective monetary policy in the future will be harmed and households and businesses will feel the consequences."
Helping to support stocks, the Standard & Poor’s/Case Shiller House Price Index showed that home price in 20 cities rose 1.2% in July of this year compared with the same month a year ago.
Pulte Group gave back 4.2% after new homes sales numbers disappointed investors, while home builders D.R. Horton and Lennar both gave back over 3% on the session.
Technology shares were also hit with Apple falling 0.7% marking its third straight daily loss and Jabil Circuit plummeting 9.5% on the day.
In bullish news, American Greetings, the greeting card maker, soared 17% after the CEO and COO offered to take the company private at $17.18 per share.
At the close of European trade, the EURO STOXX 50 plunged 2.72%, France’s CAC 40 gave back 2.82%, while Germany’s DAX 30 fell 2.00%.
At the close of European trade, the EURO STOXX 50 advanced 0.41%, France’s CAC 40 added 0.47%, while Germany’s DAX 30 climbed 0.16%.
Investors are awaiting the U.S. GDP and durable good orders on Thursday, as well as initial jobless claims.
At the close of U.S. trade, the Dow Jones Industrial Average fell 0.33%, the S&P 500 index plunged 0.57%, while the Nasdaq Composite index collapsed 0.77%.
In a report, the Census Bureau said that new home sales fell to a seasonally adjusted annual rate of 373K, from 374K in the preceding month whose figure was revised up from 372K.
Analysts had expected new home sales to rise to 380K last month.
Earlier, Federal Reserve Bank of Philadelphia President Charles Plosser, a noted inflation hawk, said a decision to roll out a third round of quantitative easing to encourage investing and hiring won't work in that households and businesses would rather pay down debts than take on new leverage.
Quantitative easing functions via pumping liquidity into the financial system in a way that pushes down interest rates across the economy to encourage borrowing.
"And as far as households are concerned, they continue to try to repair their balance sheets in the wake of substantial losses of housing wealth, as I indicated earlier. They are deleveraging and saving more. It seems unlikely that a small drop in interest rates will overturn the strong desire to save and, instead, induce households to spend more," Plosser said in a speech earlier, according to prepared remarks of his presentation.
"Thus, in my view, we are unlikely to see much benefit to growth or to employment from further asset purchases. If I am right, then conveying the idea that such action will have a substantive impact on labor markets and the speed of the recovery risks the Fed’s credibility," Plosser added.
"This is quite costly: If the public loses confidence in the central bank, our ability to set effective monetary policy in the future will be harmed and households and businesses will feel the consequences."
Helping to support stocks, the Standard & Poor’s/Case Shiller House Price Index showed that home price in 20 cities rose 1.2% in July of this year compared with the same month a year ago.
Pulte Group gave back 4.2% after new homes sales numbers disappointed investors, while home builders D.R. Horton and Lennar both gave back over 3% on the session.
Technology shares were also hit with Apple falling 0.7% marking its third straight daily loss and Jabil Circuit plummeting 9.5% on the day.
In bullish news, American Greetings, the greeting card maker, soared 17% after the CEO and COO offered to take the company private at $17.18 per share.
At the close of European trade, the EURO STOXX 50 plunged 2.72%, France’s CAC 40 gave back 2.82%, while Germany’s DAX 30 fell 2.00%.
At the close of European trade, the EURO STOXX 50 advanced 0.41%, France’s CAC 40 added 0.47%, while Germany’s DAX 30 climbed 0.16%.
Investors are awaiting the U.S. GDP and durable good orders on Thursday, as well as initial jobless claims.