Down day on Wall Street
Stocks sink on surging oil and gold prices, and weak reports on factory orders and housing.
NEW YORK (CNNMoney.com) -- Stocks tumbled Wednesday as weak economic news, spiking commodity prices and a bearish analyst note on investment firm earnings gave investors a reason to bail after the recent advance.
The Dow Jones industrial average (INDU) lost around 110 points, or 0.9%. The broader Standard & Poor's 500 (SPX) index gave back 0.9% and the Nasdaq composite (COMP) lost 0.7%.
Stocks slipped at the open on a weak factory orders report released earlier in the morning. But the selloff picked up steam later in the morning after the release of the February new home sales report and a spike in oil prices.
Oil prices jumped more than $4 a barrel after the weekly inventory report showed that crude supplies were unchanged last week, versus forecasts for an increase of 1.7 million.
On Tuesday stocks were mixed as weak readings on housing and consumer confidence offset attempts at extending a recent string of gains.
Last week, equities had surged, with the Dow jumping about 7% as investors welcomed another interest rate cut from the Federal Reserve and news that the Fed is pumping an additional $200 billion into the banking system.
"I think we saw a little bit of an oversold rally and now we're seeing a reaction to that," said Russell Lundeberg, Jr., chief investment officer at Barrett Capital Management. "People are apt in this environment to act or react to any bit of news and today it's the economic news."
He said the gyrations are an extension of the volatility that has been whipsawing stocks for months.
After the close, Oracle (ORCL, Fortune 500) reported quarterly earnings that rose from a year ago and met estimates on sales that rose a year ago and missed forecasts. Shares fell 8.5% in after-hours trading.
Homebuilder Lennar (LEN, Fortune 500) reports quarterly earnings Thursday morning. Thursday also brings the weekly jobless claims report and the final reading on GDP growth.
Economic news. New home sales fell to a 13-year low in February, the government reported. However, the decline was smaller than what economists surveyed by Briefing.com expected.
Orders for manufactured goods slumped 1.7% in February versus forecasts for a rise of 0.8%, the government reported. January's drop in durable goods was revised to 4.7% from an initial read of 5.3%.
The two reports added to bets that the economy is either in a recession or heading toward one.
Treasury Secretary Henry Paulson said that the recent Bear Stearns collapse highlights the fact that investments banks need to be brought under the kind of federal regulation that has long been given to commercial banks.
Paulson, speaking at the U.S. Chamber of Commerce, said that the Bush administration will soon release a plan that addresses this issue and is geared toward promoting better functioning of financial markets.
Chicago Fed president Charles Evans said that there has been little or no growth so far this year, but that there will be improvement in the second half of the year as the series of interest rate cuts the Fed has made begin to be felt. Evans is an alternate member of the Fed's policy-setting committee.
Company news. The $19 billion purchase of radio broadcaster Clear Channel (CCU, Fortune 500) could fall apart because banks are reluctant to provide financing to the private equity firms looking to buy the company, according to reports. Shares slid 17%.
Citigroup (C, Fortune 500) shares slipped almost 6%. The bank has agreed to pay nearly $1.7 billion to creditors of bankrupt energy firm Enron. Additionally, Oppenheimer & Co. banking analyst Meredith Whitney boosted her first-quarter loss forecast for the company.
Whitney also cut earnings estimates on Bank of America (BAC, Fortune 500), Wachovia (WB, Fortune 500) and JP Morgan Chase (JPM, Fortune 500). All three stocks declined.
Ford Motor (F, Fortune 500) said Wednesday that it will sell luxury brands Jaguar and Land Rover to India's Tata Motors Ltd. in a deal worth about $1.7 billion. The move is the latest attempt by the cash-deficient automaker to fund its turnaround plan.
Motorola (MOT, Fortune 500) said it will separate its struggling handset business from other units, forming two different publicly traded companies, following months of pressure from billionaire investor Carl Icahn and other shareholders.
And Take-Two Interactive (TTWO) told its shareholders Wednesday that they should reject the $2 billion Electronic Arts (ERTS) bid for the video game manufacturer.
On the upside, spiking oil prices gave a lift to oil services companies, including Exxon Mobil (XOM, Fortune 500), ConocoPhilips (COP, Fortune 500) and Schlumberger (SLB).
Sprint Nextel (S, Fortune 500) rose on news that Comcast (CMCSA), Time Warner (TWX, Fortune 500) and Bright House Networks are in talks to fund a new wireless company that would be run by Sprint and Clearwire (CLWR), according to the Wall Street Journal.
Market breadth was negative. On the New York Stock Exchange, losers topped winners nine to seven on volume of 1.43 billion shares. On the Nasdaq, decliners beat advancers four to three as 1.92 billion shares changed hands.
Commodities. U.S. light, crude oil for May delivery rose $4.68 to settle at $105.90 a barrel on the New York Mercantile Exchange. Oil prices hit a record $111.80 in electronic trading last week.
COMEX gold for April delivery rose $14.20 to settle at $949.20 an ounce. Gold hit an all-time trading high of $1,033.90 an ounce one week ago.
Other markets. The dollar fell versus the euro and the yen. The greenback hit an all-time low versus the euro and a 13-year low versus the yen last week.
Treasury prices rose modestly, lowering the yield on the benchmark 10-year note to 3.47% from 3.50% late Tuesday. Bond prices and yields move in opposite directions. 
-
The Becerras spoiled themselves with a puppy. Here's what 6 other readers are indulging on. More -
Santa is no part-time gig for these St. Nicks. Meet the hardest working Santas in the business. More -
More people can't afford their pets, and shelters struggle to keep up with the influx. Play -
The house on Hawaii's big island should fetch near $12 million. More -
Small automakers are beating the Big 3 in the race for sweet new rides. More -
Lauren Bush's FEED project lands her on Fortune's Most Powerful Women Entrepreneurs list. More -
Production is starting on the world's most luxe ocean liner: The Utopia. More
