NEW YORK (AP) — The stock market had its biggest decline in two weeks Tuesday, led by a sell-off in blue-chip bank and energy stocks. Homebuilders rose after the government reported sales of new homes rose in May to the highest level in six years.
The late-afternoon selling came during a relatively quiet week for Wall Street. Traders said the selling might be tied to large mutual funds having to rebalance their portfolios ahead of the end of the quarter next week. Other traders pointed to the ongoing violence in Iraq as a reason to pull out of the market ahead of the end of the quarter.
The Dow Jones industrial average fell 119.13 points, or 0.7 percent, to 16,818.13. The Standard & Poor's 500 index lost 12.63 points, or 0.6 percent, to 1,949.98 and the Nasdaq composite fell 18.32 points, or 0.4 percent, to 4,350.36.
The Dow fell more than the S&P 500 and Nasdaq as investors sold large, brand-name stocks. Exxon Mobil, Boeing, American Express and JPMorgan Chase all fell 1 percent or more.
The selling in blue-chip stocks marks a recent and notable change in trader behavior. Stocks of large, diversified companies have been among the most popular with investors this year. With the quarter end and mid-year approaching, it's not uncommon for investors to sell some of the best performing names to rebalance their portfolios.
Vertex Pharmaceuticals was a bright spot in the S&P 500. The drug company soared $26.92, or 40 percent, to $93.53 after Vertex said its treatment for cystic fibrosis appeared to work better than a placebo in a late-stage study. Vertex plans to seek approval for the treatment in the U.S. and Europe.
Traders say it's a positive sign to see investors heading back into biotechnology stocks. The sector was among the hardest hit in March and April. Even with today's declines, the S&P 500 Biotechnology index rose 1.3 percent.