The Dow and S&P 500 shed all of the year's gains in Tuesday's trading. The strong dollar was among the culprits. Fred Katayama reports.
Stocks got slammed, falling nearly across the board. The Dow and S&P 500 giving back all of the year's gains in Tuesday's trading. By the closing bell, the blue chip index had lost more than 300 points, and the S&P 500 had its biggest fall since the first week of the year. The culprits: the strong dollar and expectations the Fed may raise rates as soon as June. But the currency markets may be going too far in trying to get ahead of the decision, says Societe Generale's Sebastien Galy SOUNDBITE: SEBASTIEN GALY, SENIOR CURRENCY STRATEGIST, SOCIETE GENERALE (ENGLISH) SAYING: "We are always in a currency bubble. That's the definition of FX. What you do is undershoot and overshoot. Right now, FX is indeed overshooting the mark in terms of interest rate differentials, different forms of metrics you can look at. It's actually very difficult to assess where fair value of euro-dollar should be right now because all the models really have difficulties catching up with euro-dollar. So, we know we're in an overshoot in the case of the dollar." Energy shares weak as well. The price of crude oil continued to fall. U.S. small business optimism edged up in February to its third highest reading since 2007, according to the National Federation of Independent Business, or NFIB. The reason: tightening labor market conditions. That signals wages may rise. Wholesale inventories unexpectedly rose in January. Sales of goods recorded their biggest decline since 2009. Barnes & Noble stock took a hit. The retailer's profit rose on cost cutting. But earnings missed forecasts, partly because of a high tax bill. Shares of Urban Outfitters were by far the biggest gainer on the S&P 500, a day after its results beat estimates. Turning overseas: the major European markets covered in red as well - on new concerns about debt talks with Greece.