U.S. stocks took a tumble overnight on concerns that stocks may have risen too far too soon ahead of an actual recovery in the economy. Declines in financials stocks dragged on the markets as uncertainty over the health of financial companies crept in.
The Dow Jones industrial average fell 186 points to 9,311. The S&P500 Index lost 23 points to 998 and the NASDAQ dropped 40 points to 1,969.
In economic news: The Institute for Supply Management’s manufacturing index rose to a read of 52.9 in August, up from 48.9 in July. The read pushed the index above the 50 mark indicating expansion in the sector for the first time since January 2008.
The National Association of Realtors pending home sales index rose 3.2 per cent in July after rising 3.6 per cent in June. Economists expected a rise of 1.5 per cent.
In company news: Shares in online auctioneer eBay Inc (NASDAQ:EBAY) declined 2.08 per cent to $21.68. The company has revealed plans to sell a large stake in its Skype Internet phone business for $2.75 billion to a consortium of investors.
Shares in building products manufacturer Builders FirstSource Inc (NASDAQ:BLDR) plunged 35.24 per cent to $4.98. According to Reuters two big private equity investors have come up with a recapitalisation plan for the troubled company, realising that changes are needed to make sure the company is well positioned to take advantage of a recovery in the housing market.
Shares in oil and gas explorer Brigham Exploration Company (NASDAQ:BEXP) rose 14.66 per cent to $7.51. The company says it expects to see an increase in oil volumes in the third quarter and cash flows to remain strong.
And shares in automaker Ford Motor Company (NYSE:F) dropped 4.74 per cent to $7.24. The company reported a 17 per cent jump in sales for August compared to a year ago boosted by the governments Cash for Clunkers program.
Checking the NASDAQ Top 100: The Nasdaq was awash with red overnight, however of those stocks that did manage to close in positive territory, the best performer was Illumina adding 1.19 per cent to $35.69. Research in Motion and Oracle were the next best performers. Looking at the downside, First Solar was the worst performer, falling 5.43 per cent to $114.98, followed by Warner Chilcott and Logitech International.
