Stock sell-off gains steam

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A sell-off in stocks accelerated Tuesday, as investors weighed a surprise rate hike by the Chinese government, and some mixed data on housing and corporate results.

The Dow Jones industrial average (INDU) lost 192 points, or 1.7%, with just over an hour left in the session. IBM (IBM, Fortune 500) was leading the decline. The S&P 500 (SPX) slipped 21 points, or 1.8%, and the tech-heavy Nasdaq (COMP) fell 47 points, or 1.9%.

The sell-off came after the People’s Bank of China raised its benchmark deposit and lending rates for the first time in 3 years.

“The Chinese are basically telling the rest of the world that they’re going to slow down their economy,” said Mark McCormick, currency strategist for Brown Brothers Harriman. “It’s kind of nerve wracking for the global economy, because China has been the key driver of world growth. This was clearly a major surprise.”

But other experts said China’s move isn’t a cause for concern, and markets just needed a reason to take a breather.

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