US stocks tumbled last night, with the three major indexes posting their worst single day performance since March 13th, as disappointing results from DuPont and Countrywide Financial heightened concerns about the housing market.
Financial shares led decliners on the S&P 500 index, with Countrywide suffering its biggest decline since October 2004 after revealing its mortgage lending problems extend beyond its subprime business.
The second largest chemical maker DuPont's chief executive said he expected the US housing slump to continue for several more months, while USG Corp., the world's largest seller of gypsum wallboard for home building, projected a gloomy housing outlook.
As the impact of the housing downturn surfaces up in the results of a widening range of companies, concerns are growing about the overall health of corporate profits and the economy.
Energy companies including Exxon Mobil Corp. were dragged down by a nearly 2 per cent drop in oil prices to $73.56 a barrel.
"The excuse will be disappointing earnings, subprime mortgage problems, but ... the cause is gravity," said Al Goldman, chief market strategist at AG Edwards in St Louis.
"The bigger they are, the harder they fall. We rallied 1,000 points - from 13,000 to 14,000 - in just under three months, and so the buyers are tired and the sellers came in with some profit-taking," he said, noting that this could be the end of a pullback, instead of the beginning.
The Dow Jones industrial average was down 226.47 points, or 1.62 per cent, at 13,716.95. The Standard & Poor's 500 Index was down 30.53 points, or 1.98 per cent, at 1,511.04. The Nasdaq Composite Index was down 50.72 points, or 1.89 per cent, at 2,639.86.
Decliners outpaced advancers on the NYSE by about 10 to 1.
Countrywide Financial, the largest U.S. mortgage lender, said it posted a drop in quarterly profit and cut its full-year outlook. Countrywide shares slid 10.5 per cent to $30.50.
Meanwhile, lower-than-expected demand for Apple's iPhone launched last month soured the mood for technology shares along with a disappointing revenue outlook from chipmaker Texas Instruments.