Traders work on the floor of the New York Stock
Exchange March 25, 2015.
(Reuters) - Wall Street stocks sold off sharply, with
semiconductor and biotech shares sliding more than 4
percent, and the dollar slipped on Wednesday after
government data signaled the U.S. economic expansion was
slowing.
Treasuries also dropped in price after a
disappointing sale of new government debt, while gains
in the euro prompted a pullback in European stock
markets.
The Nasdaq was the biggest loser on Wall Street,
falling more 2 percent, after a modest rise in equities
on news of a deal between Kraft Foods (KRFT.O)
and Heinz Co to create North America's third-largest
food company gave way to a wave of selling .
Stocks were stung by data showing unexpectedly weak
U.S. durable goods orders. Losses accelerated after the
benchmark S&P 500 fell below a technical support level
near 2,085.
The Commerce Department data showed business
investment spending plans fell for a sixth straight
month in February, news that could lead economists to
lower their first-quarter U.S. growth estimates and
cause the Federal Reserve to delay interest rate hikes.
"The dollar strength can sap earnings growth, but if
you continue to see soft economic data here, a
confirmation of decelerating growth, that will certainly
affect the market," said Chad Morganlander, portfolio
manager at Stifel, Nicolaus & Co in Florham Park, New
Jersey.
The Dow Jones industrial average
.DJI ended off 292.6 points, or 1.62 percent, to
17,718.54, the S&P 500
.SPX lost 30.45 points, or 1.46 percent, to
2,061.05, and the Nasdaq Composite
.IXIC dropped 118.21 points, or 2.37 percent, to
4,876.52.
The semiconductor index .SOX slumped 4.6 percent
while the biotech index .NBI slid 4.1 percent.
Kraft shares climbed 35.6 percent to close at $83.15.
U.S. Treasury debt prices initially gained on the
weak durable goods data, but reversed to losses as a
government auction of $35 billion of five-year notes
drew tepid demand.
The benchmark 10-year U.S. Treasury note US10YT=RR
was down 11/32 in price to yield 1.9198 percent.
The pan-European FTSEurofirst 300 index
.FTEU3 of top companies closed off nearly 1 percent
as the euro rose, in part because of data showing
business in Germany was up.
Germany's Ifo index rose for a fifth successive month
to its highest level since July, suggesting growth in
Europe's largest economy rebounded again in the first
quarter of 2015.
Euro strength hit the exporter-heavy German DAX index
.GDAXI, prompting some profit-taking, analysts said.
The single currency was last at $1.0963, up 0.4
percent on the day and rising toward Tuesday's peak of
$1.1029.
The dollar index .DXY, which measures the dollar
against a basket of six major currencies, slipped 0.25
percent to 96.956. The yen was up 0.2 percent, at 119.44
to the dollar
JPY=.
The weaker dollar helped lift Brent crude oil LCOc1,
which settled up 2.5 percent at $56.48 a barrel, having
fallen earlier on mounting evidence that China's
strategic oil reserves may be nearly full and with U.S.
reserves also ballooning. U.S. crude CLc1 settled up 3.6
percent at $49.21.
Gold was up and neared a 2-1/2-week high just over
$1,200 an ounce on growing expectations the Federal
Reserve will not raise rates until September. Spot gold
XAU= was last at $1,195.90.
(Additional reporting by
Rodrigo Campos in New York; Editing by Dan Grebler
and Leslie Adler)