US stocks closed sharply lower yesterday after a consumer confidence reading missed forecasts, taking the wind out of a seven-week rally in blue chips.
A closely-watched consumer confidence index rebounded in November on the previous month, snapping five straight months of declines. But the index missed forecasts, cooling investor hopes of an economic rebound to justify the Dow's 20 per cent surge from five-year lows in early October.
"People were looking for an upside to expectations, especially at this time of the year," said Mr Art Hogan, chief market analyst at Jefferies & Co. "We've baked a lot of good news into this market in the past seven weeks."
A raft of data over the next two days is grabbing the spotlight during a holiday-shortened week on Wall Street. Trading volume is expected to be less than average as investors take off to celebrate Thanksgiving tomorrow.
The Dow Jones industrial average at the close was down 172.98 points, or 1.95 per cent, to 8,676.42, according to the latest figures. The broader Standard & Poor's 500 Index fell 19.58 points, or 2.1 percent, to 913.29.
The Nasdaq dropped 37.49 points, or 2.53 per cent, to 1,444.40.