- Major gauges plunged Tuesday, with the Dow falling more than 200 points, amid renewed fears about the housing and mortgage sectors and following some disappointing earnings news.
The Dow Jones industrial average (down 181.19 to 13,762.23, Charts) tumbled by as much as 226 points, or about 1.7 percent, with less than 20 minutes remaining in the session, after finishing nearly 100 points higher just a day earlier.
The broader S&P 500 (Charts) lost more than 2 percent. The tech-fueled Nasdaq (Charts) sank almost 1.9 percent, while the Russell 2000 (down 23.99 to 811.63, Charts) small cap index plunged nearly 3 percent.
Stocks retreated earlier in the session following disappointing results from tech bellwether Texas Instruments late Monday. The chipmaker said weak demand contributed to lower quarterly profits and sales, sending Texas Instruments (down $1.71 to $36.47, Charts, Fortune 500) shares down over 5 percent.
The selloff accelerated however after Countrywide Financial, the nation's largest mortgage lender, reported a sharp decline in quarterly profits and slashed its full-year earnings outlook.
Countrywide (down $3.96 to $30.10, Charts, Fortune 500) shares tumbled nearly 12 percent in afternoon trade on the New York Stock Exchange.
The results, combined with a dismal outlook by Countrywide's CEO about the state of the housing market, renewed recent Wall Street fears about both the housing and mortgage sector.
"I think it's combination of all of the above," said Paul Mendelsohn, chief investment strategist with Windham Financial, speaking on the market selloff. "Countrywide is clearly an issue in terms of their report this morning, but there is a lot going on across a lot of markets."
Wall Street also witnessed a number of disappointing earnings reports from a number of Dow components including chemical maker DuPont (Charts, Fortune 500), whose results fell short of estimates, sending its stock down over 6 percent in afternoon trade.
Credit card issuer American Express (down $3.14 to $61.52, Charts, Fortune 500) reported better than expected profits late Tuesday but disappointing revenue numbers, sending its shares over 5 percent lower on the New York Stock Exchange.
There were mixed results from two other Dow components Tuesday as telecom AT&T (Charts, Fortune 500) beat forecasts and fast-food leader McDonald's (Charts, Fortune 500) met expectations.
Among individual issues, 23 of the 30 Dow components were lower in afternoon trade.
In corporate news, Apple (down $7.32 to $136.38, Charts, Fortune 500) stock fell nearly 4 percent after AT&T said in its quarterly earnings report that it activated far fewer iPhones during the first two days the device was available than analysts had anticipated.
A report in the Wall Street Journal revealed that General Motors' (Charts, Fortune 500) Allison unit is having trouble selling debt to pay for its leveraged buyout by private equity firms.
Market breadth was negative. Decliners beat advancers 10 to 1 on the New York Stock Exchange on volume of 1.65 billion shares. Losers beat winners on the Nasdaq more than 5 to 1 on volume of 2.20 billion shares.
Oil prices tumbled, with U.S. light crude down $1.34 to $73.55 a barrel on the New York Mercantile Exchange.
Treasury prices rose in afternoon trade, lowering the yield on the 10-year note to 4.93 percent from 4.95 percent late Monday.
The dollar fell against the euro and the yen. Top of page
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