Stocks fall again, erasing gains for year

The sell-off in U.S. stocks accelerated, wiping out gains for the year in both the S&P 500 Index and the Dow Jones Industrial Average, as mixed corporate earnings and weak housing data fueled anxiety that rising prices will crimp economic growth. Treasuries rallied for a second day on demand for haven assets.

The S&P extended its October rout to 8.8 percent, making it the worst month since February 2009. Disappointing earnings from AT&T and Texas Instruments drove declines in the communications and semiconductor groups, offsetting a promising outlook from Boeing. The Dow tumbled 600 points, and the Nasdaq Composite Index lapsed into a correction from its record closing high in August.

Amid the flood of earnings that will bring reports from Alphabet, Intel and Amazon.com on Thursday, economic data continues to underwhelm, particularly on the rate-sensitive housing front. New home sales sank again, sending battered homebuilders lower. Fragile market sentiment is also working through reports that potential bombs were sent to two former U.S. presidents and the New York headquarters of CNN.

“There’s just right now a heightened sensitivity to what can go wrong,” Kate Warne, investment strategist at Edward D. Jones & Co., said in an interview at Bloomberg’s New York headquarters. “So we will have more of these days where stocks move a lot within the day as everyone’s trying to sort through what do today’s reports mean.”

European politics were also in focus, with Italian Prime Minister Giuseppe Conte doubling down on his government’s budget and U.K. Prime Minister Theresa May’s cabinet descending into conflict. The pound weakened, and the region’s bonds rallied. The euro dropped following disappointing manufacturing data.

“Right now markets are still trying to reprice,” said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance. “What’s happening with earnings is exaggerating market moves.”

Elsewhere, oil fell to lowest in almost two months even after a pledge by Saudi Arabia to meet any shortfall that materializes from Iranian sanctions.