Friday, September 22, 2023
Homeus marketsUS stocks finish with steep losses on China growth worries

US stocks finish with steep losses on China growth worries

U.S. stocks declined sharply on Thursday, with the Dow extending losses into a third session, after measures of U.S. and Chinese manufacturing disappointed and as Wall Street considered quarterly reports from companies including McDonald's and Netflix.

Wall Street's drop stems largely from worries about China, "as far as economic growth is concerned, and the potential for it to lead to pressure on loans they have outstanding; that's weighing on the market," said Robert Pavlik, chief market strategist at Banyan Partners.

"Earnings season is not proving all that much help right now. It's not terrible, but it's not outstanding. People are looking for this long overdue correction, so this is early kindling to that potential fire," Pavlik added.

Asian stocks fell after a Chinese gauge fell to 49.6 from 50.5, weaker than expected. Conversely, a euro-area manufacturing index climbed to 53.9 from 52.7 in December. And, U.S. manufacturing growth slowed in January, according to data released by Markit.

"While there is a lot of optimism for global growth in 2014, the picture still looks muddied, especially in emerging markets which is where the real growth alpha has come from," emailed Peter Boockvar, chief market analyst at the Lindsey Group.

Major U.S. Indexes

After falling as much as 232 points during the session, the Dow Jones Industrial Average ended at 16,197.35, down 175.99 points, or 1.1 percent.

The declined 16.40 points, or 0.9 percent, to 1,828.46, with the financial sector hardest hit and telecommunications the sole sector rising.

Shares of fell more than 10 percent after Reuters reported a of the nutrition company, which has been accused of running a pyramid scheme by hedge-fund manager William Ackman.

The Nasdaq shed 24.13 points, or 0.6 percent, to 4,218.87.

Netflix jumped after it forecast customer growth that beat expectations; McDonald's shares wavered after the fast-food chain and Dow component reported weaker-than-expected quarterly revenue.

Beyond the Chinese news, Randy Frederick, managing director of active trading and derivatives at Charles Schwab, pointed to potential trouble brewing over the nation's borrowing ceiling as a possible trouble spot for Wall Street, saying February could prove to be "a rocky month."

In a letter to Congress, U.S. Treasury Secretary Jacob Lew on Wednesday urged lawmakers to raise the debt limit by Feb. 7 to provide "certainty and stability to the economy and financial markets."

The held steady against other currencies and the 10-year dropped 9 basis points to 2.78 percent.

For every share falling, two rose on the New York Stock Exchange, where 780 million shares traded. Composite volume approached 4 billion.


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