NEW YORK – NEW YORK (AP) — Stocks dropped for a second day Tuesday after home sales dropped unexpectedly and the White House vowed to fight a court ruling against an offshore drilling moratorium.
The Dow Jones industrial average fell 149 points, its biggest drop in about two weeks. Treasury prices climbed after demand for safe investments rose.
The National Association of Realtors reported that sales of existing homes fell 2.2 percent in May. The report surprised analysts who thought sales would get a lift from a homebuyer tax credit. Sales fell to a seasonally adjusted annual rate of 5.66 million from a revised 5.79 million in April.
Homebuilder Toll Brothers Inc. slid 3.2 percent, while Hovnanian Enterprises Inc. fell 3.5 percent.
Oil stocks fell after the administration said it would appeal a judge's decision to overturn a six-month ban on deepwater oil drilling in the Gulf of Mexico.
Baker Hughes Inc., a supplier of oil drilling parts and services, fell 4.4 percent, while oil-services company Halliburton Inc. fell 3.9 percent.
Technology shares fell less than the broader market after Apple Inc. said it sold 3 million iPads in the first 80 days the tablet computers were on sale in the U.S. The stock rose 1.4 percent and helped limit the losses in the tech-heavy Nasdaq composite index.
The selling intensified shortly before 2 p.m. Eastern time, when the benchmark Standard & Poor's 500 index fell below 1,100, its average finish of the past 200 days. Many professionals consider the 200-day moving average, as it's called, to be a predictor of the market's direction. The drop below 1,110 hastened the market's slide because computer programs kicked in and drove more selling.
The slide also came as the Federal Reserve held the first part of a two-day meeting, at which it's expected to keep its benchmark federal funds rate at the current range of zero to 0.25 percent. The Fed is maintaining low rates because high unemployment and weakness in the housing market have held back an economic rebound.
Christian Hviid, chief market strategist at Genworth Financial Asset Management in Encino, Calif., said traders are concerned that the Fed will issue a more pessimistic view of the economy in the statement that accompanies its decision on interest rates Wednesday.
He said expectations for the economy in the second half of the year might have been too high given that borrowing is still restricted and that consumer spending is still weak.
"Not all risk is gone," Hviid said.
According to preliminary calculations, the Dow fell 148.89, or 1.4 percent, to 10,293.52, its biggest point loss since June 4. The S&P 500 index fell 17.89, or 1.6 percent, to 1,095.31, while the Nasdaq fell 27.29, or 1.2 percent, to 2,261.80.