U.S. stocks slid on Thursday, as world central banks said they would scale back infusions of U.S. dollars into their banking systems and after weak U.S. housing data.
The markets dropped on news that the Federal Reserve, along with other central banks, would reduce programs to provide institutions with short-term liquidity, a sign the removal of monetary stimulus was underway.
Existing home sales unexpectedly fell in August, following several months of strong reports that investors interpreted as evidence the housing market had reached bottom.
Perfection is priced into the market, and anything less than that is going to result in a pullback, said Harry Rady, the chief executive officer of Rady Asset Management in San Diego.
If there's any more weak data ahead, and the home sales data suggests to me that we'll see more weak data, I think we're going to keep seeing pullbacks.
The Dow Jones industrial average <.DJI> was down 57.43 points, or 0.59 percent, at 9,691.34. The Standard & Poor's 500 Index <.SPX> shed 11.26 points, or 1.06 percent, at 1,049.61. The Nasdaq Composite Index <.IXIC> sank 30.01 points, or 1.41 percent, at 2,101.50.
The central bank news came a day after a Fed policy statement indicated it would start to reduce support for financial markets, sparking a selloff in stocks.
You can't continue to bail out this economy without negative ramifications, said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
The Dow Jones U.S. Home Construction index <.DJUSHB> fell 1.6 percent while Lennar
This makes me extremely bearish on consumer spending, Rady said. This could be one of many signs of what's to come.
Stocks rose temporarily after government data showed an unexpected fall in the number of workers filing new claims for jobless benefits.
Drug store Rite Aid
(Additional reporting by Chuck Mikolajczak; Editing by Kenneth Barry)