US Stocks Drop Sharply on Slumping Home Sales

New York, Oct 29 – US stocks posted heavy losses Wednesday after lower-than-expected monthly home sales fuelled speculation of a weak economic recovery.

The sell-off comes as the US government is due to report third-quarter economic growth figures Thursday morning. The economy is widely expected to have pulled out of its longest recession in decades, but all signs point to a sluggish recovery.

Economists expect growth to have rebounded to an annualised 3.2 percent in the quarter, according to a Bloomberg News survey.

The Commerce Department reported that sales of new homes fell 3.6 percent in September, pushing an index of homebuilders down 5.5 percent.

The blue-chip Dow Jones Industrial Average lost 119.48 points, or 1.21 percent, closing at 9,762.69. The broader Standard and Poor’s 500 Index plunged 20.78 points, or 1.95 percent, to 1,042.63. The technology-heavy Nasdaq Composite Index plummeted 56.48 points, or 2.67 percent, to 2,059.61.

The US currency climbed against the euro to 67.99 euro cents from 67.57 euro cents Tuesday. The dollar fell against the Japanese currency to 90.77 yen from 91.83 yen.

Posted by Vamban on Oct 29, 2009 @ 5:40 AM Filed under America, World News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry