Recovery worries hit Wall St

New York - US stocks tumbled on Wednesday amid concerns over the pace of economic recovery following an unexpected decline in new home sales and dampening consumer sentiment.

The Dow Jones Industrial Average lost 119.48 points (1.21%) to 9 762.69 at the market close, a day after Wall Street closed mainly negative following a weaker-than-expected consumer confidence report.

The tech-heavy Nasdaq shed 56.48 points (2.67%) to 2 059.61 and the broad-market Standard & Poor's 500 index retreated 20.78 points (1.95%) to a preliminary 1 042.63.

Stocks plunged on fears that the continuation of the economic recovery "may be stalling," exacerbated by an unexpected drop in new home sales, analysts at Charles Schwab & Co said in a note to clients.

"The uncertain economic backdrop is overshadowing a solid gain in durable goods orders and another round of better-than-expected earnings reports," they said.

US new home sales fell unexpectedly in September after five consecutive monthly increases, government data showed on Wednesday.

The Commerce Department said sales of new single-family homes dropped at a seasonally adjusted annual rate of 402 000 or by 3.6% last month from a revised 417 000 in August.

That was far below market forecasts of a level of 440 000 in September as analysts had expected sales to post their sixth consecutive monthly gain with builders cashing in on a federal tax credit for first-time homebuyers that expires at the end of next month.

Fresh data Wednesday showing new orders for US manufactured durable goods rising 1.0% in September hardly impacted the market, analysts said.

- AFP