Stocks plummet. Dow drops below 15,000.
Stocks fell sharply Wednesday and the Dow Jones industrial average closed at 14,960, the first close below 15,000 since May 6. Stocks started lower and declined steadily throughout the day.
New York — A series of weak economic reports sent the Dow Jones industrial average plunging 217 points to its lowest level in a month.
The troubling economic data included weak hiring at private companies, orders to U.S. factories that were lower than expected and sluggish job growth in the service sector.
Companies like miners, banks and chemical makers, whose fortunes are most closely tied to the prospects for growth, fell the most. That's a sign investors are becoming less confident in the U.S. economy.
The Dow Jones industrial average closed at 14,960, a drop of 1.4 percent. It's the first close below 15,000 since May 6 and the biggest decline in seven weeks.
Intel fell the most in the Dow, dropping 66 cents, or 2.6 percent, to $24.70. Aluminum maker Alcoa was close behind with a decline of 2.2 percent, or 18 cents, to $8.20.
Stocks started lower and declined steadily throughout the day. After rising every month this year and climbing to record levels this spring, some said a pullback was overdue.
"The rally is tired and people are taking some profits." said Brad Reynolds, at investment advisor LJRP.
Investors were also unnerved by a plunge in mortgage applications last week. That's a disappointment because the rebound in housing has been one of the key factors supporting the stock market's record-breaking rally this year.
Applications for home loans dropped 11.5 percent from a week earlier, the Mortgage Bankers Association said Wednesday. The decline came as mortgage rates rose the highest point since April 2012. The rate for a 30-year fixed-rate mortgage rose to 4.07 percent last week from 3.90 percent.
The rise in mortgage rates is due in large part to a jump in the yield on the 10-year Treasury note. The yield climbed as high as 2.2 percent last week, the highest in more than two years.
There was also disappointing news on hiring, another one of the key supports for the market's rally this year.
A measure of employment in the service sector fell to the lowest level since last July. That's a troubling sign because service companies, a broad category that includes entertainment, transportation and health care, have been the main source of job gains in the past several months.
That report was released shortly after payroll provider ADP said U.S. businesses added just 135,000 jobs in May, the second straight month of weak gains. The increases are much lower than those reported over the winter, which averaged more than 200,000 a month from November through February.
The Standard & Poor's 500 index was down 22 points, or 1.4 percent, to 1,608. The index is about 3 percent below its record close of 1,669 reached May 21.
The losses were broad. All 10 industry groups in the index declined. The sell-off was led by companies that make basic materials, industrial companies and banks.
As traders sold stocks, the moved money into the haven of U.S. government bonds. The yield on the 10-year Treasury note fell to 2.09 percent from 2.15 percent late Tuesday.