U.S. Stocks Drop as S&P 500 Has Biggest Loss Since August; Wal-Mart Slumps - Bloomberg

U.S. stocks tumbled, dragging the Standard & Poor’s 500 Index to its biggest decline since August, as violence escalated in Libya and Wal-Mart Stores Inc. reported sales that trailed its own forecasts.

Wal-Mart fell 3.1 percent, the most since May 20. Bank of America Corp. retreated 3.9 percent after almost doubling a writedown for its credit-card unit to $20.3 billion. Freeport- McMoRan Copper & Gold Inc. slumped 4.9 percent as copper fell the most in three months amid concern that surging oil costs may slow economic growth. Exxon Mobil Corp. and Chevron Corp. rallied as Middle East tensions sent oil to a two-year high.

The S&P 500 declined 2.1 percent to 1,315.44 at 4 p.m. in New York, its biggest drop since Aug. 11. The Dow Jones Industrial Average retreated 178.46 points, or 1.4 percent, to 12,212.79, snapping a three-day rally. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, soared 27 percent to 20.80, the biggest advance since May 20.

“The market is extremely vulnerable to the kind of global risk we’re seeing now,” said Tom Mangan, who helps oversee $2.5 billion as a money manager at James Investment Research Inc. in Xenia, Ohio. “If the violence in Libya turns into a prolonged civil war, it will increase the risk that oil supplies could be disrupted. This could be the catalyst that starts the 5 percent to 10 percent correction.” more ...