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US indices fall on weak housing data

Anna Fedorova
Written By:
Anna Fedorova

The S&P 500 index fell on Monday, after the latest US housing data came in weaker than expected, fuelling concerns over the strength of the economic recovery.

Existing home sales fell by 1.8 per cent in August, far below the 1 per cent growth predicted by experts.

In reaction, the S&P 500 index fell 0.8 per cent to 1,994, its lowest level since early August, while the Dow Jones finished the day 0.6 per cent weaker, and the Nasdaq fell 1.1 per cent.

All 10 primary S&P sectors traded lower, consumer discretionary being the worst performing sector, down 1.5 per cent, as fears a slowdown in the housing market will make consumers feel less wealthy impacted sentiment.

Elsewhere, housing stocks were also hit by the news, with some falling more than 2.5 per cent on the day.

The weak data suggests the recovery in the US may be less stable than experts previously thought and could push a rate hike by the Federal Reserve further into the future.

Overnight Japan also saw falls, with the Nikkei 225 off 0.7 per cent, although Chinese shares climbed marginally.