U.S. Stocks Slump, Treasuries Rally on Homes Sales ReportBy...

U.S. Stocks Slump, Treasuries Rally on Homes Sales Report
By Michael P. Regan - Aug 24, 2010

U.S. stocks extended losses, sending the Dow Jones Industrial Average below 10,000, and the 10-year Treasury yield fell below 2.5 percent for the first time since 2009 as a bigger-than-estimated slump in existing home sales fueled concern the economy may relapse into recession.

The Standard & Poors 500 Index slumped 1.9 percent to 1,047.49 at 10:01 a.m. in New York. The Dow Jones Industrial Average plunged 174.98 points, or 1.7 percent, to 9,999.43.

Purchases of existing homes plunged 27.2 percent to a 3.83 million annual rate, figures from the National Association of Realtors showed today in Washington. The pace compares with the median forecast of a 4.65 million rate, according to a Bloomberg News survey.

The S&P 500 fell 12 percent from its 2010 high on April 23 through yesterday, as reports on U.S. jobs and manufacturing pointed to a slowdown and the Federal Reserve said a recovery may take longer than expected. The decline has pushed the gauges valuation to 14 times its companies reported earnings, the lowest level in about six weeks.

U.S. benchmarks fell for a third day yesterday, sending the S&P 500 to a five-week low, as concern the economy may return to recession overshadowed speculation takeovers will accelerate.