US stocks tumble on weak economic data

NEW YORK: US stocks opened sharply lower Wednesday as investors weighed disappointing economic data and worried about the protracted Greek debt crisis.

The Dow Jones Industrial Average dropped 89.61 points (0.74 percent) to 11,986.50 as of 1440 GMT.

The broader S&P 500 index fell 9.95 points (0.77 percent) to 1,277.92, while the tech-heavy Nasdaq Composite shed 17.00 points (0.63 percent) at 2,661.77

"The US equity markets are under pressure in morning action as the euro-area debt crisis and some unfavorable US manufacturing and inflation data are erasing yesterday's solid advance," Charles Schwab analysts said.

US inflation reached an annualized 3.6 percent in May, the Labor Department said, indicating that rising prices threaten to chew away at consumers' earnings.

Meanwhile a report showed that manufacturing in the New York region fared worse than expected.

In Europe, protests swelled in Greece over austerity measures. On Tuesday, eurozone finance ministers failed to reach accord at talks on a second bailout package to avert a Greek default.

One bright spot was the initial public offering of Internet radio company Pandora, whose share price surged more than 50 percent on the first day of trading.

The broad market retreat erased many of the gains that US stocks had enjoyed on Tuesday, when the three major US stock market indices rallied more than one percent.

Bond prices rose on Wednesday as investors sought safer assets.

The yield on the 10-year US Treasury note fell to 3.06 percent from 3.10 percent on Tuesday, while that on the 30-year bond dropped to 4.29 percent from 4.30 percent. Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011