European debt concerns and disappointing housing data dragged the benchmarks into the red for the third straight day. Moreover, with five-straight days of losses, the Standard & Poor 500 (S&P 500) suffered the longest decline since July 12.
The Dow Jones Industrial Average (DJI) lost 0.3% to end at 13,413.51. The S&P 500 slipped 0.6% to finish yesterday's trading session at 1,433.32. The tech-laden Nasdaq Composite Index shed 0.8% to close at 3,093.70. The fear-gauge CBOE Volatility Index (VIX) surged 8.9% to settle at 16.81. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and the Nasdaq were roughly 6.54 billion shares, just above last year's daily average of 6.53 billion shares. Declining stocks outpaced the advancers on the NYSE; as for 57% stocks that dropped, 39% stocks moved higher.
Protests in Spain and Greece related to austerity measures threatened a worsening European economic situation and dampened investor sentiment. The protests sparked off apprehensions about Europe's ability to control its debt crisis. Spanish Prime Minister, Mariano Rajoy is slated to ask for rescue money from European policymakers; amidst anti-austerity protests. To add to these worries, secessionist talks have sprung off in the wealthy northeastern region, Catalonia. Catalonian President Artur Mas's suggestion for more tax autonomy was declined by Rajoy, and so the former planned early elections in November. Also, Artur Mas announced that Catalonia would hold a referendum on independence. In response, the central government said such a move would be unconstitutional.
Separately, the Greek government also faced anti-austerity protests, which was joined by the Greek trade unions. Also, international lenders jolted hopes about fixing the nation's debt crisis. The Greek government is scheduled to present European officials with budget-cutting plans later this week.
The U.S. Department of Housing and Urban Development jointly released data on sales of new single-family houses in August 2012, which came in at a seasonally adjusted annual rate of 373,000, down 0.3% from the revised July rate of 374,000. Consensus estimates had projected the figure to come in at 380,000. The prices of new homes rose to a five year high after it registered an increase of 11.2% in the median price in August.
The dismal data affected the housing sector and the SPDR S&P Homebuilders (XHB) was the biggest decliner on Wednesday, plunging 2.3%. Stocks including The Ryland Group, Inc. (NYSE: RYL ), PulteGroup, Inc. (NYSE: PHM ), D.R. Horton, Inc. (NYSE: DHI ) and KB Home (NYSE: KBH ) declined 5.7%, 4.7%, 3.9% and 3.5%, respectively.
Utilities were the only gainer yesterday. The Utilities Select Sector SPDR (XLU) rose 0.2% and stocks such as PG&E Corporation (NYSE: PCG ), The Southern Company (NYSE: SO ), Dominion Resources, Inc. (NYSE: D ) and FirstEnergy Corp. (NYSE: FE ) gained 0.8%, 0.8%, 0.5% and 0.3%, respectively.
While investors preferred to bet on the defensive avenues like utilities and consumer staples, they were less confident about risky areas like energy and technology. The Technology Select Sector SPDR (XLK) lost 0.7% and stocks including Oracle Corporation (NASDAQ: ORCL ), Apple Inc. (NASDAQ: AAPL ), Microsoft Corporation (NASDAQ: MSFT ) and QUALCOMM, Inc. (NASDAQ: QCOM ) shed 1.8%, 1.2%, 0.7% and 0.6%, respectively. Additionally, The Energy Select Sector SPDR (XLE) plunged 0.9% and stocks such as Halliburton Company (NYSE: HAL ), Valero Energy Corporation (NYSE: VLO ), Marathon Oil Corporation (NYSE: MRO ) and Schlumberger Limited (NYSE: SLB ) lost 2.4%, 1.8%, 1.5%, 0.9%, respectively.