Stocks fell sharply Tuesday after office-supply giant Staples and other retailers offered disappointing quarterly results and a U.S. Federal Reserve (Fed) official said interest-rate increases might come sooner than expected.
Stocks fell to session lows after Fed Bank of Philadelphia President Charles Ploser said the central bank’s current pace of reducing monthly bond purchases could be too slow if the economy improves as forecast.
There was no major U.S. economic news released Tuesday. The U.S. dollar gained versus the euro and the yen. Light sweet crude for July delivery fell 17 cents to $102.44 a barrel. Gold futures rose 80 Cents to $1,294.60 an ounce.
The Dow Jones industrial average fell 137.55, or 0.8 percent, to 16,374.31. Twenty-six of the index’s 30 components fell, led by Caterpillar, which reported that machine sales plunged 13 percent in the three months ending in April. Its shares fell almost 4 percent.
The broader Standard & Poor’s 500 index fell 12.25, or 0.65 percent, to 1,872.93. General Motors (GM) recalled another 2.4 million vehicles, and the automaker’s shares fell 3 percent.
The technology-heavy Nasdaq composite index fell 28.93, or 0.7 percent, to 4,096.89. Shares of Staples fell 12.5 percent on weak first-quarter profit and a warning that results in the current quarter are likely to miss Wall Street expectations.