US stocks tumble after Spain debt auction

NEW YORK: A dreadful Spanish bond auction and the reluctance of the Federal Reserve to launch a fresh round of US stimulus sent Wall Street share prices tumbling Wednesday.

The Dow Jones Industrial Average dropped nearly one percent.

"The weakness comes amid continued concerns in Europe and yesterday's Federal Reserve meeting minutes that dampened expectations of any further economic stimulus," said analysts at Charles Schwab & Co.

Before the US trading session Spain raised nearly 2.6 billion euros (US$3.4 billion) at auction but was forced to pay higher rates amid fresh concerns over its strained public finances despite a tough budget.

That helped the blue-chip Dow sink 124.80 points (0.95 percent) to 13,074.75, with banks leading the downward charge.

Bank of America was down three percent. JPMorgan Chase shed 2.2 percent

General Electric was also sharply lower after Moody's downgraded the firm's credit rating.

Despite the conglomerate's insistence that its "liquidity and capital position have never been stronger," and that "Moody's actions are based on a change in their own methodology rather than our credit position," GE shares fell about one percent.

Solid, if unspectacular, US data was not enough to stem Wall Street losses.

US businesses added fewer jobs than expected in March, though job creation in prior months was revised higher, data from payrolls firm ADP showed.

Meanwhile the non-manufacturing sectors saw a slowdown in activity.

"US industries outside of manufacturing decelerated in March, but the overall pace is still near the highest in a year,' said Jennifer Lee, a senior economist with BMO Capital Markets.

Analysts at Briefing.com said that had little impact on the market: "Stocks didn't have much of an immediate reaction to the reading, but some subsequent selling now has the Nasdaq at a fractionally extended session low."

The tech-rich Nasdaq was down 45.48 points or 1.46 percent, to reach 3,068.09 points.

The broad-market S&P 500 shed 14.42 points (1.02 percent) to 1,398.96. -- AFP