Late-session selloff drags U.S. stocks sharply lower

09:05, June 02, 2010      

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Another late-session selloff dragged Wall Street sharply lower on Tuesday after major indexes struggled to pare early losses during the day.

The Dow Jones industrial average tumbled 112.61, or 1.11 percent, to 10,024.02. The Standard & Poor's 500 index plunged 18. 70, or 1.72 percent, to 1,070.71 and the Nasdaq was down 34.71, or 1.54 percent, to 2,222.33.

Major indexes fell rapidly in final minutes of trading after media reported the United Stated had launched criminal probe of the oil spill in the Gulf of Mexico.

Energy stocks were under great pressure throughout the day as BP announced its "top kill" operations failed to stop the flow of oil from the gushing well in the Gulf of Mexico. BP's share tumbled about 15 percent during the session while the company has lost nearly 40 percent of its market value since the April 20 explosion on the Deepwater Horizon rig.

Before the late-session plunge, the market was struggling to pick a direction in most time of the day, as investors weighed refreshed concerns over European banks against encouraging construction and manufacturing data inside the United States.

Wall Street followed overseas markets lower on Tuesday as the euro hit a new four-year low of 1.2112 dollars, after European Central Bank warned late Monday that although it estimates that potential loan write-down for the continent's bank system will peak this year, "it is probable that loan losses will remain considerable in 2011 as well."

However, investors found some relief after the U.S. Department of Commerce said construction spending jumped 2.7 percent in April, far exceeding economists' expectations for a 0.2 percent gain and also the largest monthly increase in nearly ten years.

Meanwhile, the Institute for Supply Management's survey of purchasing managers reported a May reading of 59.7, which fell from April's level of 60.4 but was still slightly stronger than market expectation.



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