The stock market tumbled again Wednesday as signs of a slowdown in U.S. job growth and troubles overseas added to mounting worries about the nation’s manufacturing sector.
The Dow Jones industrial average fell nearly 500 points, a selloff that can mostly be traced to deepening investor angst about U.S. industry, says Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. On Tuesday, a closely watched index showed U.S. manufacturing contracting for a second straight month and at the fastest pace in 10 years,
“That really shook people up,” Zaccarelli says. “They thought the U.S. was more resilient” amid a persistent global slowdown. The report revealed a growing impact from the U.S. trade war with China.
“There may be some increased concern about rolling over into a recession,” says Nick Reece, senior analyst at Merk Investments.
Charles Schwab eliminates online trading commissions: Fee war escalates, stock tanks
The worries only compounded Wednesday with cuts to Germany’s growth forecast and a surprisingly weak private employment report.
The Dow dropped 494 points, or 1.9%, to close at 26,078. The blue-chip index has plunged 838 points, or 3.1%, the past two days. The Standard & Poor’s 500 index fell 53 points, or 1.8%, to 2,887. And the tech-heavy Nasdaq slid 123 points, or 1.6%, to 7,785.
Private payroll processor ADP said 135,000 private-sector jobs were added in September, modestly below the 140,000 economists expected. Perhaps of greater concern: August's gains were revised down to 157,000 from 197,000.
Reece downplayed the ADP tally, which tries to predict the Labor Department’s more closely watched employment report but often misses the mark. Rather, he says investors may be positioning themselves ahead of Thursday’s data on the service sector, which makes up about 80% of the economy, and Labor’s jobs report Friday.
Weakness in those broader indicators could significantly ratchet up recession fears, Reece says.
Meanwhile, a dispute between the U.S. and Europe over airplane manufacturers has opened the door for President Donald Trump to impose new tariffs on European goods. That would inject even more uncertainty into global markets as the U.S. and China remain locked in a trade dispute.
States with the highest and lowest household income: Maryland leads the way, data show
Technology stocks were the biggest losers, led by declines from Microsoft and Apple. The sector has been extremely sensitive to shifts in economic forecasts and swings in the ongoing trade war between the U.S. and China.
Banks were also among the biggest losers as bond yields continued to slide. Citigroup fell 2.5% and Bank of America fell 1.6%. The yield on the 10-year Treasury fell to 1.59% from 1.64% late Tuesday. Lower bond yields force interest rates on loans lower, hurting banks.
Sinking bond yields are a sign that investors are shifting money into less-risky holdings because economic growth is in doubt. Another safe-play asset, utilities stocks, held up better than the rest of the market.
Stocks in Europe and Asia fell broadly as the global prospects for economic growth dim amid trade uncertainty. A group of leading think tanks joined the German government in cutting the economic forecast for Europe’s largest economy.
The European Union is trying to avoid even more uncertainty and is urging President Donald Trump to hold off on additional tariffs in a dispute stemming from subsidies for airplane makers Airbus and Boeing. The World Trade Organization ruled the U.S. can raise tariffs on up to $7.5 billion worth of European goods in response to illegal Airbus subsidies.
Stocks have gone cold in October as trade worries dampen economic growth prospects.
The S&P 500 is already down 3% for the month. The tech-heavy Nasdaq is down 2.9%.
October could turn out to be more volatile than usual after a relatively calm September. Most of the movement in the market was very slight last month, despite that month’s reputation for large swings, said Ryan Detrick, senior market strategist for LPL Financial, in a note.
“This normally volatile month could be passing some big moves to October this year,” he said.
U.S. and Chinese envoys are expected to meet for yet another round of trade talks next week, potentially swaying the market sharply depending on any news produced from those negotiations.
Even a modest agreement between the two countries likely would fuel a rebound in markets, Zaccarelli says.
Contributing: Associated Press
Business - Latest - Google News
October 02, 2019 at 09:29PM
https://ift.tt/2pnf5lH
Dow: Signs of slowing job growth, troubles overseas push US stocks lower - USA TODAY
Business - Latest - Google News
https://ift.tt/2Rx7A4Y
Bagikan Berita Ini
0 Response to "Dow: Signs of slowing job growth, troubles overseas push US stocks lower - USA TODAY"
Post a Comment