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Fundamentally there is nothing new to precipitate the move, but sentiment appears to be in flux, with caution about high stock prices finally beginning to erode the confidence of buyers.
By early afternoon in New York, the Dow was down 0.85% or 136 points at 15,872, with only a handful of components managing to hold positive territory. Visa acted as the biggest drag on the index, dropping more than 1.5%.
The little US economic data we’ve seen so far this week has been strong , with an upbeat set of manufacturing reports yesterday and big jumps in US sales for November announced by car manufacturers today, with Chrysler saying it enjoyed a 16% jump from the same month last year. GM was not far behind, while Toyota, Nissan and Ford all saw significant increases in sales, driven by the popularity of big pickup trucks.
The fall in share prices against a backdrop of positive economic news suggests that investors have one eye on what this means for the Fed’s stimulus. That will come into sharper focus as the week continues, with the release of crucial monthly employment data on Friday.