Late plunge takes Dow below 10,000

08:21, May 27, 2010      

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A late-session plunge took Wall Street to negative territory on Wednesday, with the Dow ending below 10,000 for the first time since February, showing market sentiment was fragile at the moment.

The Dow Jones industrial average fell 69.30, or 0.69 percent, to end at 9,974.45, after surging as much as 1.4 percent in morning trading. It was the eighth drop for the Dow in 10 days.

The Standard & Poor's 500 index dropped 6.08, or 0.57 percent, to 1,067.95 and the Nasdaq declined 15.07, or 0.68 percent, to 2, 195.88.

U.S. stocks kicked off the session on a high note on Wednesday, as investors cheered a double dose of upbeat economic data from the Commerce Department.

First, orders for durable goods increased 2.9 percent in April to a seasonally adjusted 193.9 billion dollars, primarily pushed forward by a huge surge in civilian airplanes. The reading was much better than economists had expected, showing the manufacturing factor was still on track for recovery.

In addition, purchases of new homes in the U.S. jumped in April to the highest level in two years as buyers rushed to qualify for a government tax credit before it expired at the end of the month.

According to the report, sales of new single-family homes rose 14.8 percent to an annual rate of 504,000 units in April, after a 29.8 percent surge in March.

The stock slump at day's end was the opposite of Tuesday, when major indexes erased most of the morning losses and ended little changed.

Wednesday's reversal came after the euro weakened again and approached its four-year low, a sign how nervous traders are about the debt problems in Europe.

U.S. stocks have been tracking the movement of the 16-nation currency for weeks. A sliding euro indicates waning confidence in Europe's ability to handle the debt problems in the euro-zone.

Microsoft had the biggest decline in the Dow, slumping 4.07 percent to end at 25.01 dollars per share after its CEO Steve Ballmer said problems in Europe will have a ripple impact.



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