US stocks sank on Tuesday, after disappointing data on durable goods led to speculations that economic growth was slowing down.
Just after 11:00 in New York, the Dow Jones Industrial Average was down 325.20 points, while the S&P 500
and the Nasdaq lost 33.18 and 100.06 points respectively.
Orders for durable US good declined 3.4% in December, registering the fourth decline in the past five months and falling well below the expected 0.1% decline.
According to figures released by the Commerce Department on Tuesday, durable goods orders for November were revised to show a 2.1% drop instead of a 0.9% drop.
Meanwhile, US house prices rebounded by 0.2% in November, to lower the year-over-year gainto 4.3%, according to the S&P/Case-Shiller 20-city composite. The report released on Tuesday, showed that on a seasonally adjusted basis home prices advanced 0.7%.
The consumer confidence index soared in January to a seven-year high of 102.9, while new-home sales rose 11.6% in December.
"This survey suggests that annualised real consumption growth in the first quarter of this year may be between 3.5% and 4.0%, following our estimate of 3.5% in the fourth quarter of last year," said Andrew Hunter, economist at Capital Economics.
"In all, after the weak durable goods orders data released earlier today implied that business investment is struggling, this surge in confidence suggests that consumption is having no such problems."
In corporate news, Microsoft was trading almost 10%, after JP Morgan cut the company to neutral from overweight. The tech giant's commercial sales fell below expectations late on Monday.
"Microsoft had already set the stage for disappointment overnight after it offered a weaker outlook for its software business," said CMC Markets analyst Jasper Lawler.
"Microsoft beat earnings estimates and announced a share buyback scheme of $30bn which is larger than previous years although perhaps not quite as aggressive as some had called for."
Caterpillar fell over 7% after announcing a disappointing outlook for 2015 and reporting lower-than-expected earnings, while DuPont fell almost 3% after posting a 5% decline in fourth quarter sales.
Procter & Gamble fell almost 4% after disappointing results, while Pfizer slid after a downbeat profit and sales outlook.
Gold futures advanced by over 1% to $1,293.90, while the dollar
fell over 0.7% against the pound and the yen and by over 1.2% over against the euro.
Oil prices rebounded slightly, with Brent crude and West Texas intermediate gaining 0.4% and 0.6% respectively, trading at just over $48 and $45 a barrel.