US stocks dropped on Tuesday, giving the S&P 500 its biggest decline in two months, on increasing views the Federal Reserve may raise rates as soon as June. The Dow and S&P 500 ended in negative territory for the year, with the S&P 500 off 3.5 percent from its March 2 record closing high. Those Fed worries pushed the US dollar to a nearly 12-year peak against the euro, and added to concerns the dollar will continue to weigh on US multinationals' earnings.
-- Dow, S&P 500 end in negative territory for year
Friday's stronger-than-expected jobs report was largely behind the recent rate jitters. "The issue out there has been the strong employment report, which has set off fears of an interest rate hike by the Fed sooner or more aggressively than had been anticipated," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
All 10 of the S&P 500 sectors ended lower. Financial and technology sectors, each down more than 2 percent, were the biggest drags. Shares of Wells Fargo were down 2.5 percent at $53.29. The Dow Jones industrial average fell 332.78 points, or 1.85 percent, to 17,662.94, while the S&P 500 lost 35.27 points, or 1.7 percent, to 2,044.16, its biggest daily percentage decline since January 5.
The Nasdaq Composite dropped 82.64 points, or 1.67 percent, to 4,859.80. "For large-cap US multinationals, what will the be the cost of hedging and the impact on earnings growth?" said Oliver Pursche, chief executive officer of Bruderman Brothers in Suffern, New York. Shares of IDT Corp dropped 21.2 percent to $16.30, a day after it released results.
On the upside, Urban Outfitters Inc rose 11.5 percent to $44.06, the S&P 500's biggest daily percentage gainer, after reporting earnings late Monday that beat expectations. About 7 billion shares changed hands on US exchanges, above the 6.5 billion average for the month to date, according to BATS Global Markets. Declining issues outnumbered advancing ones on the NYSE by 2,256 to 835, for a 2.70-to-1 ratio; on the Nasdaq, 2,077 issues fell and 664 advanced, for a 3.13-to-1 ratio. The S&P 500 posted five new 52-week highs and 15 new lows; the Nasdaq Composite recorded 44 new highs and 87 new lows.
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