Stocks slump amid global jitters. Tech falls.
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Stocks slipped as investors digested news that inflation at the producer level rose more than expected, while housing starts plunged, and as investors continued to digest the implications of a in Japan and heightened tensions in the Middle East.
The fell more than 60 points after a tumultuous trading day that ended with the Dow down about 138 points on Tuesday, .
IBM, General Electric and Microsoft led the blue-chip index lower, while Caterpillar and Bank of America gained.
The and the also fell. , widely considered the best gauge of fear in the market, rose nearly 3 percent, above 25.
All key S&P 500 sectors skidded, led by technology, health care andindustrials.
The a seasonally adjusted 1.6 percent in February, up from 0.8 percent the month before, the Labor Department reported. The core PPI, excluding food and energy costs, rose 0.2 percent from a 0.5 percent gain the month before.
Meanwhile, the as starts fell 22.5 percent to an annual rate of 479,000 units, the biggest drop in 27 years, the Commerce Department reported. Building permits sank to 517,000 units from a revised 563,000, a 20 percent drop from February 2010.
The dollar fell to a record low against the Swiss franc and to a four-month low against the Japanese yen. The U.S. currency also slumped .
fell in morning trading despite a rebound in stocks in Tokyo. Two more earthquakes rocked Japan in the last 24 hours and shook buildings in Tokyo, reminding investors of the country鈥檚 fragile situation.
鈥淭he bounce is obvious...but you鈥檝e got to go back to the fundamentals in Japan which are just nasty,鈥� Keith McCullough, CEO of Hedgeye Risk Management told CNBC. He said that the consensus that events in Japan would not affect US growth was "reckless".
Investors will keep one eye on developments in Japan Wednesday, as well as in the Middle east after from a central roundabout that had become the symbol of an uprising by the island's Shi'ite Muslim majority.
Moody's Investors Service by two notches to A3, citing high borrowing costs.
Toyota Motors shares gained in pre-market trading on Wednesday after news it would restart production of spare parts at seven plants in central Japan, but would keep its 12 main assembliy plants shuttered until March 22.
Among insurers, Aflac gained after an upgrade by Deutsche Bank to "buy" from "hold", saying the stock was beaten up more than warranted since Japan's earthquake and tsunami. Aflac's shares have plunged 9 percent because of the company's significant exposure to Japan. But Deutsche Bank said Aflac's losses due to the tragedy "would be less than two quarter鈥檚 worth of capital generation." The brokerage has a $60 price target on the stock.
The House Energy and Commerce Subcommittees on energy and power, and the environment and the economy hold a joint hearing on the Energy Department and Nuclear Regulatory Commission budgets at 9:30 am.
The hearing is expected to include discussion of 20 proposed .
Treasury Secretary Timothy Geithner testifies about President Obama鈥檚 budget plan at 2 p.m.
Also in economic news, the seasonally adjusted index of mortgage application activity fell 0.7 percent as home purchases slowed for the week ended March 11.
