Global-growth worries hit stocks
NEW YORK — More evidence that global economic growth is slowing pushed the U.S. stock market down Thursday for a third-straight day.
The Standard & Poor’s 500 index fell 6.52 points, or 0.3 percent, to 1,932.24. The Dow Jones industrial average lost 78.57 points, or 0.5 percent, to 16,201.32. The Nasdaq composite fell 18.27 points, or 0.4 percent, to 4,734.48.
The market fell sharply at the open, pushing stocks close to their lowest levels of the month, before rebounding during afternoon trading to close with only slight losses.
The government reported that orders for long-lasting U.S. manufactured goods dropped in August. A key category that tracks business investment plans was especially weak.
“We’re looking for that good news and we’re not getting any,” said John Toohey, vice president of equity investments at USAA.
The market has been in a funk for the past month as investors worry that slowing growth overseas, particularly in China, will hurt U.S. companies. A decision by the Federal Reserve to hold its benchmark interest rate close to zero this month also made investors uneasy.
The policymakers’ decision came despite an improving job market and a steady economy. Fed Chairman Janet Yellen told reporters after the meeting last week that worries about China and emerging markets were a factor in deliberations.
“She, in essence, moved the goal posts,” said Quincy Krosby, a market strategist for Prudential Financial. “That just made the market think, ‘Hey, does this mean we’re never going to have a rate increase?’” The S&P 500 has fallen 9.2 percent since setting a record close of 2,130.82 in May and is on track for its secondstraight month of losses.
“The Fed backed themselves into a corner last week by talking about China and emerging markets,” said Andrew Brenner, the head of international fixed income for National Alliance Capital Markets. “The fact that they’re adding China and emerging markets into the mix and then still thinking about raising rates between now and the end of the year is very inconsistent. It adds uncertainty to the market. That’s why equities have been performing poorly since midday of the Fed announcement.”
European markets also fell Thursday. Germany’s DAX dropped 1.9 percent, Britain’s FTSE 100 declined 1.2 percent, and France’s CAC 40 lost 1.9 percent.
Automakers in Europe are still suffering in the wake of Volkswagen’s emissions scandal. While VW’s stock closed flat on the day, fellow German carmaker BMW fell 5.2 percent after a report said one of its models had failed a test in Europe. Fiat Chrysler fell 7.5 percent.
In commodities trading, benchmark U.S. crude rose 43 cents to $44.91 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for many international oils imported by U.S. refineries, rose 42 cents to $48.17 a barrel.
Bond prices rose, pushing the yield on the 10-year Treasury note down to 2.12 percent from 2.15 percent a day earlier. The dollar slipped to 120.06 yen. The euro ticked higher to $1.1221.
Information for this article was contributed by Kate Garber and Anna-Louise Jackson of Bloomberg News.