By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks declined for the third
straight session on Tuesday as fears over global growth and
escalating war in the Middle East sent investors scrambling for
havens like U.S. Treasurys.
Equities in Europe were particularly hard hit, while the 10-year
Treasury note yield fell 3 basis points to 2.53%.
Sentiment was hit by weak European data, which overshadowed
better-than-expected Chinese manufacturing numbers. U.S. airstrikes
in Syria on Monday evening against extremist fighters, known as the
Islamic State, reminded traders of heightened geopolitical
risks.
The S&P 500 (SPX) closed 11.52 points, or 0.6%, lower at
1,982.77. The Dow Jones Industrial Average (DJI) shed 116.68
points, or 0.7%, to 17,056.00. The Nasdaq Composite (RIXF) dropped
19 points, or 0.4%, to 4,508.69.
Chris Gaffney, senior market strategist at EverBank Wealth
Management, said mild weakness in stocks is not surprising after
weak data from overseas, but remains optimistic in the longer
term
"The environment for stocks remains favorable, as the Fed
continues to stay accommodative. Earnings continue to increase and
there is lack of alternatives. We expect stocks to finish the year
higher," said Gaffney.
"However, we believe the era of rising tides when all stocks
were lifted is over and stock selection is more important," he
added.
Monday's session on Wall Street was grueling for technology and
small-cap stocks, as investors grew nervous about falling commodity
prices and concerns about global economic growth. The Nasdaq
Composite (RIXF) lost 1.1%, while the Russell 2000 (RUT) dropped
1.5%, in its worst trading day since late July. Read: Russell 2000
'death cross' looms
Opinion: Everyone is a genius in a Fed-induced stock rally
In economic data, home prices inched up in July, but growth
slowed down, according to data released Tuesday. The "flash"
reading of U.S. manufacturing conditions was unchanged in
September, keeping the index at a 52-month high, according to data
released by Markit Tuesday.
Stocks to watch: Alibaba Group Holding Ltd. (BABA) fell 3% after
a more than 4% drop in the U.S. regular session on Monday.
CF Industries Holdings Inc. (CF) shares rose 5.3% after it
confirmed merger talks with Norwegian chemical company Yara
International.
Google Inc. (GOOG) shares fell 1.1% after the EU's competition
chief Joaquín Almunia said the search company must improve its
proposed settlement over antitrust concerns or face formal
charges.
Other markets: Hong Kong stocks closed lower, as casino stocks
sold off. European stocks fell 1.4% on weak data. As equities
pulled back, beaten-down gold(GCZ4) and silver (SIZ4) moved up,
while the dollar eased some against major crosses.
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