The Dow fell to 26,000, as the downturn in the US real estate sector provokes fears of a recession

The Dow and U.S. stock market traded lower on Tuesday after government data showed housing starts tanked in December, highlighting extensive damage to the real estate sector since interest rates began to rise. All of Wall Street’s major indexes showed weakness through the early part of trading Tuesday, reflecting tepid pre-market conditions for Dow futures. The Dow Jones Industrial Average fell 67 points, or 0.3%. to 26,024.55. Less than half of the index’s 30 members traded lower, though big losses for Caterpillar Inc. (CAT) and Home Depot Inc. (HD) offset more modest gains elsewhere.

Shares of Home Depot were under pressure after the home-improvement retailer reported quarterly results that were weaker than expected. The company’s quarterly adjusted earnings per share came in at $2.09 compared to projections calling for $2.16. Revenue rose to $26.49 billion, lower than the $26.57 billion expected.

The broader S&P 500 Index dipped 0.1% to 2,795.53. Most of the 11 primary sectors tracked by Standard & Poor’s traded lower, with utilities leading the declines. Materials and consumer discretionary shares were also under pressure. Information technology was the lone sector to report gains.

Still, the Nasdaq Composite Index was unable to rally. The tech-laden average fell 0.2% to 7,540.95. The U.S. stock market advanced on Monday but finished well off session highs. Volatility climbed nearly 10% during the session, potentially signaling rocky trading conditions ahead. The CBOE VIX Volatility Index peaked at 15.28 on Tuesday, its highest in almost two weeks. VIX last week closed at its lowest level in over four-and-a-half months.

Dow Drops Toward 26,000 as US Housing Slowdown Sparks Recession Fears, CCN, Feb 26