The Dow started sinking after the Philadelphia branch of the Federal Reserve reported a manufacturing slowdown resulting from a steep drop in companies’ orders. Then the losses just accelerated. Mining and other companies that made basic materials fell hard after prices for commodities such as copper and oil dropped. Elsewhere, the Labor Department reported that the four-week average of applications for unemployment benefits jumped to the highest level since September. The National Association of Realtors also reported that sales of previously owned homes dropped 1.5 percent in May. All this unfolded a day after the Federal Reserve slashed its estimates for U.S. economic growth and said it would extend a bond-buying program through the end of the year. The moves disappointed investors who had hoped for bolder steps from the central bank to get the economy going again. “What’s worse is that things are getting weaker without the Fed coming in,” said Rex Macey, chief investment officer at Wilmington Trust Investment Advisors. “We had a run-up in the market this month because people had been expecting Fed action. Today, the market is giving it back.” The Dow lost 250.82 points to close at 12,573.57, a drop of 2 percent.AP also reports that the president was already losing ground:
WASHINGTON (AP) — Fighting a swell of economic anxiety, President Barack Obama has lost much of the narrow lead he held just a month ago over Mitt Romney and the two now are locked in a virtually even race for the White House, according to a new Associated Press-GfK poll. The survey also found a majority of Americans disapproving of how the Democratic president is handling a national economy that fewer people think is improving. Less than five months before the election, 47 percent say they will vote for the president and 44 percent for Romney, a difference that is not statistically significant. The poll also shows that Romney has recovered from a bruising Republican primary, with more of his supporters saying they are certain to vote for him now. The economy remains Obama's top liability. Only 3 out of 10 adults say the country is headed in the right direction and 55 percent disapprove of his handling of the economy, the highest level detected in AP-GfK polls this year.