The Standard & Poor’s 500-stock index posted its biggest intraday drop of the year Tuesday as escalating tensions in the Middle East and North Africa sent oil prices soaring.
The S&P 500 fell 2.1 percent, to 1,315.44 on Tuesday, its biggest intraday point drop since Aug. 11, 2010. It was the measure’s biggest percentage drop since Oct. 19, 2010. Traders noted that the market’s losses deepened after the S&P 500 fell through support at the 1,324 level.
The Dow Jones Industrial Average sank 178.46 points, or 1.4 percent, to 12,212.79. At its lows of the day, the Dow had its biggest intraday point drop since Nov. 16 and its biggest percent drop since Jan. 28, when news of unrest in Egypt spooked investors.
Walmart Stores weighed on the Dow, sliding 3.9 percent after the retailer’s fiscal fourth-quarter profit rose 27 percent, capitalizing on strength in its international business, but its US operations continued to struggle. Walmart posted its seventh consecutive quarter of lower US same-store sales, and fourth-quarter revenue fell short of analysts’ expectations.
Bank of America fell four percent after saying its credit-card subsidiary was restating eight quarters of reports to regulators because it took a $20.3-billion write-down because of deteriorating credit and new regulations over the past two years.
Energy components were among the measure’s few positive stocks as oil prices surged. Chevron gained 2.1 percent, while Exxon Mobil rose one percent.
The Nasdaq Composite sank 2.7 percent to 2,756.42.
Global stock markets extended Monday’s declines as violence increased in Libya, a major oil-producing state. Libyan traders said the country had shut all ports, which would reopen in two to three days.
Crude-oil prices jumped as unease over the turmoil in Libya and parts of the Middle East mounted. Libya produces 1.8 million barrels of oil daily, and its 41 billion barrels of proven reserves represent more than three percent of global supplies. Nymex oil prices for March delivery were up six percent over Friday’s close.
Tuesday’s tumble came as a relief to some market participants unnerved by the market’s recent unrelenting climb, even in the face of earlier unrest in Egypt.
“When the market starts shrugging off geopolitical issues and ignoring it completely, it’s cause for concern,” said Jennifer Ellison, principal at Bingham, Osborn & Scarborough. “It’s a positive that we’re getting some sort of reality check in the market here.”
In US economic data, a reading of US consumer confidence hit a three-year high, reaching 70.4 in February, well above the 66 expected by economists. The S&P Case-Shiller 20-city home-price index fell 2.4 percent year-over-year, slightly more than the two percent drop economists surveyed by Dow Jones Newswires had predicted.
The S&P 500-stock index closed down 2.1 percent to 1,315.45 Tuesday — the benchmark index’s largest intraday point drop since August.
The Dow Jones Industrial Average fell 1.4 percent to 12,212.41, while the Nasdaq Composite fell 2.7 percent to 2,756.42.
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