US stocks dropped sharply on Tuesday, pushing the Dow down more than 200 points in its second-biggest drop of the year, as mounting losses in the subprime mortgage sector and weak retail sales caused investors to sell riskier assets.
The New York Stock Exchange instituted trading curbs at 1904 GMT as stock selling accelerated. The Mortgage Bankers Association reported late payments on mortgages and foreclosures on US homes rose in the fourth quarter to their highest level in years. The trend was driven by subprime borrowers, who have weak credit.
Shares of financial services companies with exposure to the mortgage market were among the biggest decliners. Bank of America Corp fell 2.9 percent to $49.62. Also, General Motors Acceptance Corp, the former finance arm of General Motors Corp, said it would receive another $1 billion from GM and warned it would be hit by pressure from a weakening market for US mortgages.
Shares of GM dropped 2.8 percent to $30.44. The Dow Jones industrial average was down 208.21 points, or 1.69 percent, at 12,110.41. The Standard & Poor's 500 Index was down 25.28 points, or 1.80 percent, at 1,381.32. The Nasdaq Composite Index was down 43.03 points, or 1.79 percent, at 2,359.26. Before the open, the Commerce Department said retail sales, excluding automobiles, unexpectedly declined in February, raising worries about economic growth.
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