US stocks drop at close, pare early gains

A screen displays the Dow Jones Industrial Average as a trader passes by on the floor after the closing bell at the New York Stock Exchange August 25, 2015. [Photo/Agencies]

NEW YORK - US stocks erased early rebound in the final section of the trading, extended the drop Tuesday.

Equity markets were boosted by China's interest cut and upbeat US economic data in the morning. At midday, the Dow Jones Industrial Average surged 2.42 percent, the S&P 500 gained 2.48 percent, the Nasdaq Composite Index spiked 3.39 percent.

The People's Bank of China (PBOC), China's central bank, announced on Tuesday a cut in the reserve requirement ratio (RRR) and lower key interest rates.

Wall Street was cheered by the move, which was described in a PBOC statement as "promoting restructuring" to "stabilize the real economy".

US sales of new single-family houses in July were at a seasonally-adjusted annual rate of 507,000, said the Commerce Department Tuesday.

US consumer confidence for August came in at 101.5, up from 91.0 in July, according to the New York-based research group Conference Board Tuesday.

The Dow tumbled 204.91 points, or 1.29 percent, to 15,666.44. The S&P 500 shed 25.6 points, or 1.36 percent, to 1,867.61. The Nasdaq Composite Index sank 19.76 points, or 0.44 percent, to 4, 506.49.

In other markets, the US dollar soared against other major currencies on Tuesday after slumping to seven-month lows against the Japanese yen and euro in the previous session.

In late New York trading, the euro fell to 1.1423 dollars from 1.1591 dollars in the previous session. The US dollar bought 119.79 Japanese yen, higher than 118.62 yen of the previous session.

Oil prices bounced Tuesday as traders bought the dip after prior day's sharp decline. The West Texas Intermediate for October delivery moved up $1.07 to settle at $39.31 a barrel on the New York Mercantile Exchange, while Brent crude for October delivery increased 52 cents to close at $43.21 a barrel on the London ICE Future Exchange.

Gold futures went down Tuesday, the most active gold contract for December delivery fell $15.3, or 1.33 percent, to settle at $1,138.3 per ounce.