US STOCKS tumble on Fed taper fears

U.S. stocks tumbled Thursday, along with Asian and European equities as well as gold and bonds, after the Federal Reserve signaled its bond buying could be scaled back later this year.

Downbeat Chinese manufacturing data further weighed on sentiment.

U.S. stocks dropped to session lows. The Dow Jones Industrial Average fell 285 points, or 1.9%, to 14,828, with all of its 30 components in negative territory.

Intel Corp. and Walt Disney Co. led the Dow lower, with both stocks dropping more than 3%.

The S&P 500 index dropped 32.70 points, or 2%, to 1,596.23, with all 10 of its major industry groups trading lower and consumer staples posting the biggest declines.

The Nasdaq Composite lost 68 points, or 2%, to trade at 3,375.50.

On Thursday, the 10-year yield climbed as high as 2.461%.

In economic news Thursday, initial weekly jobless claims rose by 18,000 to a seasonally adjusted 354,000. Economists expected claims to rise to 340,000.

Markit’s U.S. flash manufacturing purchasing managers’ index edged down to a 52.2 reading in June from 52.3 in May. Thursday’s economic reports also included better-than-anticipated figures for sales of existing homes and the Philadelphia Federal Reserve’s index of business conditions. Existing-home sales rose 4.2% in May to 5.2 million, above the 5 million expected by economists.

The Philly Fed’s index rose to 12.5 in June, easily beating the negative 1.0 that economists anticipated. The Conference Board’s index of leading indicators edged up 0.1% in May to 95.2. That was slightly less than the 0.2% gain forecast by economists.

Despite the housing data, shares of homebuilders were among the worst performers. Toll Brothers (TOL) fell 5.28%, D.R. Horto (DHI) down  9.34% and Lennar (LEN) lost 8.59%.

The sharp drop in gold prices weighed on shares of mining companies, including Newmont Mining (NEM), down -7.12%, and Freeport-McMoRan (FCX) down 5.28%.

Drugstore chain Rite Aid (RAD) fell 9.49%  as it swung to a profit but revenue declined in the latest quarter.

Tech giant Oracle (ORCL) retreated 2.82%.

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