Stocks slump amid global jitters. Tech falls.
IBM, General Electric and Microsoft lead the market lower. Dow falls more than 60 points initially.
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Stocks slipped as investors digested news that inflation at the producer level rose more than expected, while housing starts plunged, and as investors continued to digest the implications of a nuclear crisis in Japan and heightened tensions in the Middle East.
All key S&P 500 sectors skidded, led by technology, health care andindustrials.
The Producer Price Index rose a seasonally adjusted 1.6 percent in February, up from 0.8 percent the month before, the Labor Department reported. The core PPI, excluding food and energy costs, rose 0.2 percent from a 0.5 percent gain the month before.
Meanwhile, the housing sector was hit with bad news as starts fell 22.5 percent to an annual rate of 479,000 units, the biggest drop in 27 years, the Commerce Department reported. Building permits sank to 517,000 units from a revised 563,000, a 20 percent drop from February 2010.
European markets fell in morning trading despite a rebound in stocks in Tokyo. Two more earthquakes rocked Japan in the last 24 hours and shook buildings in Tokyo, reminding investors of the country’s fragile situation. (Click here for more news on the disaster in Japan).
“The bounce is obvious...but you’ve got to go back to the fundamentals in Japan which are just nasty,” Keith McCullough, CEO of Hedgeye Risk Management told CNBC. He said that the consensus that events in Japan would not affect US growth was "reckless".
Investors will keep one eye on developments in Japan Wednesday, as well as in the Middle east after Bahraini police cleared protesters from a central roundabout that had become the symbol of an uprising by the island's Shi'ite Muslim majority. (Click here for more on the crisis in the Middle East and North Africa.)
Toyota Motors shares gained in pre-market trading on Wednesday after news it would restart production of spare parts at seven plants in central Japan, but would keep its 12 main assembliy plants shuttered until March 22.
Among insurers, Aflac gained after an upgrade by Deutsche Bank to "buy" from "hold", saying the stock was beaten up more than warranted since Japan's earthquake and tsunami. Aflac's shares have plunged 9 percent because of the company's significant exposure to Japan. But Deutsche Bank said Aflac's losses due to the tragedy "would be less than two quarter’s worth of capital generation." The brokerage has a $60 price target on the stock.
The House Energy and Commerce Subcommittees on energy and power, and the environment and the economy hold a joint hearing on the Energy Department and Nuclear Regulatory Commission budgets at 9:30 am.
The hearing is expected to include discussion of 20 proposed nuclear plants and nuclear safety.
Also in economic news, the Mortgage Bankers Association's seasonally adjusted index of mortgage application activity fell 0.7 percent as home purchases slowed for the week ended March 11.