Stocks slide
U.S. stocks forfeited their gains from the week on Friday, when the Dow Jones slid 496 points, or 2 percent, after worrisome data came in from China. The Standard & Poor’s 500-stock index was down 1.9 percent, and Nasdaq was 2.3 percent in the red.
U.S. stocks forfeited their gains from the week on Friday, dropping after worrisome data came in overnight from China.
The Dow Jones industrial average slid 496 points, or 2 percent, to finish the session at 24,100. The Standard & Poor’s 500-stock index was down 1.9 percent and the Nasdaq was 2.3 percent in the red.
All 11 U.S. S&P sectors were down Friday, with health and technology leading the way. All 30 Dow stocks took losses, with health giant Johnson & Johnson suffering a 9 percent decline on a Reuters report that said the company knew for decades that there sometimes were small amounts of asbestos in its baby powder.
The Dow, down 550 points at its Friday low, and the S&P were on pace for their worst quarter since 2011. The S&P 500 was back in correction territory on the retreat and saw its sixth decline in eight sessions.
The tech-heavy composite Nasdaq is straddling break even for the week, but it is up slightly on the year. It is on track for its worst quarter since 2008.
The retreat came on steep losses in Asia, where the Japanese Nikkei 225 dropped 2 percent, the Hang Seng in Hong Kong dropped 1.6 percent and the Shanghai Composite was down 1.5 percent.
U.S. investors were reacting to news that the Chinese economy may be weakening.
China’s retail sales are growing at the slowest pace in 15 years, according to November data. Industrial production is down as well.
“We are getting a validation of the forecasts for lower Chinese economic growth,” said Sam Stovall, chief investment strategist at CFRA.
“China contributes to the earnings growth in U.S. companies,” Stovall said. “If the second-largest economy in the world begins to stumble, it will have a ripple effect around the globe.”
Stovall said the Chinese economy is expected to grow 6.6 percent this year, while slowing to 6 percent growth in 2019.
“Many are now wondering if that 6 percent forecast is too optimistic,” Stovall said.
Markets lurched around all week, with the Dow bouncing hundreds of points a day as nervous investors unpacked every piece of news, looking for clues on which to trade.
Sentiment swayed by the minute as news poured out about Brexit, China, oil prices, tweets and a wild Oval Office a tense exchange between President Donald Trump, and Rep. Nancy Pelosi, D-Calif., and Sen. Chuck Schumer, D-N.Y.
“It was a volatile, nervewracking week,” said Kenny Polcari of Butcher-Joseph Asset Management. “Just when you think the market is settled, you get hit out of left field.”
“Throw in the uncertainty over next Wednesday, when the Fed is expected to announce a quarter point increease in interest rates,” Polcari said. “The concern is what they say about what’s going to happen in 2019.”