With an hour left in afternoon trading, the US markets were all in the red as disappointing housing data re-affirmed that the US economy is slowing down.
The Dow Jones, the S&P 500 and the Nasdaq retreated 0.99%, 1.29% and 1.29%, respectively, just an hour before the closing bell.
July`s sales of previously-owned US homes fell by more than 27% largely because of the phase-out of a federal tax credit, it was reported, trailing economic forecasts.
The National Association of Realtors said existing-home sales fell to a seasonally adjusted annual rate of 3.83 million in July from 5.26 million the month before and 5.14 million a year earlier, while sales of single-family homes fell 27.1% - the lowest rate in 15 years.
Diversified building materials companies chalked up losses as the US housing market decelerates. CRH Plc (NYSE: CRH, LON: CRH) plunged 15.7%, while Lafarge S.A. (PINK: LFRGY) fell 4.6%, and cement manufacturer Cemex (NYSE:CX) retreated 4.18%.
Dell (Nasdaq: DELL) also fell 2.51% to $11.64, as reports suggested the company was preparing a sweetened offer for data-storage company 3Par after its earlier bid was beat by HP`s $1.6 billion proposal. Shares of 3Par gained 3.26% to trade at $26.94.
Among one of the largest decliners of the day was Medtronic (NYSE: MDT), which plunged 10.26% to $31.4. The heart device maker lowered its fiscal 2011 earnings guidance to $3.45 to $3.53 per share from between $3.54 to $3.64 per share.
Other companies in the sector also fell, including Johnson & Johnson (NYSE: JNJ), which declined 1.17% to $58.19 and Stryker Corporation (NYSE: BSX), which lost 5.68% to trade at $43.45.
Further economic reports due later in the week include a report on new-home sales and weekly jobless claims.
Commodities
Crude oil futures plunged 1.68% to trade at $72.38 per barrel on the back of economic worries, while gold futures edged up 0.33% to $1,232 per ounce as investors seek safety from the slowing US economy. Silver futures declined 1.18% to $17.83 per ounce.
Canadian markets
The S&P/TSX index was down 1.13% to trade at the 11,585 level going into market close, with six of eight Canadian sector indices posting losses.
The financial and metals and mining sectors dropped the most, retreating by 2.7% and 2.36%, respectively.
Magna International (TSX: MG.A) and Manulife Financial Corp (TSX:MFC, NYSE: MFC) led the list of decliners, retreating 3.57% to $79.13 and 5.49% to $11.7, respectively.
Red Back Mining (TSX: RBI, PINK:RBIFF) and Cott (TSX:BCB, NYSE:COT) resisted the market trend to post gains of 2.34% and 3.34%, respectively.