US open: Equities slide despite better than expected housing data

Just after 1500 BST, the Dow Jones Industrial Average was down 29 points to 17,516.12, while the S&P 500 and the Nasdaq fell four and 20 points respectively.

Tuesday data

Construction on new US homes grew in July at their fastest pace since the recession, figures released on Tuesday showed.

According to the Commerce Department, housing starts climbed 0.2% last month to 1.21m, the highest rate since October 2007, and above the 1.19m analysts had estimated.

Meanwhile, housing starts in June were revised upwardly from 1.17m to 1.20m.

"Stronger starts and construction boosted our estimate of residential investment and added 0.1 percentage points to our third quarter GDP tracking estimate, bringing it to 2.7%," analysts at Barclays said in a note.

Elsewhere, China’s Shanghai Composite Index recorded its biggest fall in three weeks after slumping 6.15%, as investors dismissed signs of recovery in the country’s housing market, while European equities struggled for direction.

“The sentiment surrounding the US futures market has changed, and the concerns over Greece and China are weighing on the market,” said IG’s market analyst David Madden.

“The US market finished on a high note yesterday, but the tone is very different today as the US follows it lead from the Far East and Europe.”

The dollar was broadly flat against the yen but gained 0.33% against the euro and lost 0.69% against the pound, after the British currency was boosted by a stronger-than-expected CPI reading.

Gold futures shed 0.45% to $1,113.40, while oil prices were mixed, with West Texas Intermediate rising 0.17% to $41.94 a barrel, while Brent lost 0.43% to $41.68 a barrel and $48.53 a barrel.

Wal-Mart slides

In company news, Home Depot rose 2.26% after the home improvement chain’s second quarter results met expectations.

Luxury handbag maker Coach climbed 2.83% after analysts at Jefferies lifted their rating on the stock from ‘hold’ to ‘buy’ citing “visible green shoots in the business.”

Retailer giant Wal-Mart slid 2.49% after the group’s second quarter results fell short of estimates as currency headwinds weighed heavily on profit.

US-listed shares of Royal Dutch Shell could be in focus after the oil giant received a final approval from the US government to drill for oil and natural gas in the Arctic Ocean.