U.S. stocks declined sharply Tuesday, with energy hardest hit, with traders citing uncertainty about the tension between Russia and Ukraine.
Stocks sold off rapidly, with the Dow dropping as much as 176 points, following media reports on comments by Polish officials on the crisis.
The CBOE volatility Index, a measure of investor uncertainty, spiked 7.7 percent to 16.29.
Target slid after the discount retailer cut its second-quarter profit outlook; Halliburton and Chesapeake Energy were among the energy companies falling along with energy costs, and Coach gained after the luxury retailer tallied better-than-expected quarterly revenue.
The Institute for Supply Management’s service index climbed to 58.7 in July for its highest reading since December 2005, while a separate survey found orders for U.S. factory goods rising 1.1 percent in June.
The data showed “continued strength in the overall economy, and people are reading it as the Fed is going to raise rates soon, that is part of what has markets in a funk right now,” said Paul Nolte, senior vice president and portfolio manager at Kingsview Asset management.
The upbeat reports on the economic rebound “again brings the policy of the Federal Reserve front and center and that is why good economic news is not translating into better stock-market performance,” emailed Peter Boockvar, chief market analyst at the Lindsey Group.
The S&P 500 lost 17.96 points, or 0.9 percent, to 1,921.03, with energy the worst performing and all 10 main sectors in the red.
The Nasdaq dropped 33.80 points, or 0.8 percent, to 4,350.08.
For every share rising, roughly three fell on the New York Stock Exchange, where 363 million shares exchanged hands by 2 p.m. Eastern. Composite volume cleared 2 billion.
Economic data from outside the United States Tuesday had China’s services purchasing managers’ index dropping to 50.0 in July from 53.1 in June, with the disappointing report somewhat countered by separate numbers showing expansion in the euro-zone’s service sector.
“We had some economic news out of Europe this morning that was not that bad, and then the Chinese service index actually receded, so mixed economic activity abroad,” said Peter Cardillo, chief market economist at Rockwell Global Capital.
“The market is probably going to look at the economic numbers, since the geopolitical factors this morning reflect less of a concern, as the truce in Gaza is under way; that gives investors more reason to focus on the economy,” said Cardillo.
On Monday, stocks climbed, with the S&P 500 bouncing back from its biggest weekly hit since 2012, as companies including Berkshire Hathaway reported results.