US stocks slid on Monday as worries about the housing slump's impact on the economy rattled investors, driving down shares of bellwethers such as Caterpillar Inc. Technology shares also took a heavy beating as investors worried about the outlook for business spending.
Concerns about the specter of rising inflation also put investors on edge after last week's reports showed rising prices pressure on the consumer front and at the wholesales level. The inflation data helped to sour expectations for more rate cuts by the Federal Reserve, heightening fears of a recession and dimming hopes for a year-end equity rally.
"There's such a total lack of good news to hold onto for the balance of the year," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey. "There's more selling as a result of uncertainty."
The Dow Jones industrial average was down 68.69 points, or 0.51 percent, at 13,271.16. The Standard & Poor's 500 Index was down 7.08 points, or 0.48 percent, at 1,460.87. The Nasdaq Composite Index was down 27.08 points, or 1.03 percent, at 2,608.68.
Morgan Stanley cut its rating on Caterpillar to "underweight" from "equal weight," according to theflyonthewall.com, a financial Web site. Shares of Caterpillar, whose products include heavy earth-moving equipment, were the top drag on Dow, falling 2.6 percent to $71.52 on the New York Stock Exchange.
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