Saturday, February 24, 2018

Dow has its worst day of the new year

U.S. stocks tumbled on Monday, pushing the Dow Jones Industrial Average down more than 320 points after reports of sluggish U.S growth added to investor worries about the global economy. The slump follows the Dow's worst January performance since 2009.

The market stumbled from the get-go, with U.S. markets opening lower after declines in European and Japanese indexes. Then it quickly turned into a slide as a spate of discouraging economic data on everything from manufacturing to auto sales to construction spending poured in.

By late afternoon, the sell-off accelerated further, bringing the Dow down more than 7 percent for the year. The S&P 500 index was down more than 5 percent on the year.

Some stock watchers took the market's decline in stride. They considered it a necessary recalibration following the market's record highs at the end of last year.

"It's a bit painful for investors to see the equities markets drop as they have, but this is healthy for this market," said Chris Gaffney, a senior market strategist at EverBank. "We've been almost 21/2 years without a 10 percent correction. So we're still in that healthy correction, if you will."

All told, the Dow tumbled 326.05 points, or 2.1 percent, to 15,372.80. It fell as much as 342 points earlier in the afternoon. The Standard & Poor's 500 index lost 40.70 points, or 2.3 percent, to 1,741.89. The Nasdaq composite dropped 106.92 points, or 2.6 percent, to 3,996.96.

There were signs of worry throughout the market. The VIX index, a measure of stock market volatility, rose to its highest level since December 2012. Investors shifted into U.S. government bonds, pushing yields lower and continuing their sharp decline since the start of the year.

Staffing company Robert Half International fell the most among stocks in the S&P 500 index. CarMax and Pfizer were among the few stocks to eke out gains on the day.

Cold weather in the United States emerged as common problem for the economy last month.

Investors were discouraged Monday by a private survey showing U.S. manufacturing barely expanded last month as frigid temperatures delayed shipments of raw materials and caused some factories to shut down. Construction spending rose modestly in December, slowing from healthy gains a month earlier.

Automakers also piled on the disappointing news, as an icy January slowed vehicle purchases.

GM sales fell 12 percent, while Ford said sales fell 7 percent. Chrysler bucked the trend with U.S. sales gains of 8 percent, and analysts still expect U.S. auto sales to reach more than 16 million this year — a return to pre-recession levels.

"Investors had expectations going into 2014 of a much stronger U.S. economic recovery than actually what we're seeing and we've had to reset our expectations," Gaffney said.

Fresh signs of weakness in China also were a factor.

An official Chinese manufacturing survey released over the weekend showed factory output grew at a slower rate in January compared with December in the world's second-largest economy. The report released on the weekend followed an HSBC survey that showed an outright contraction in manufacturing.

Investors have been looking for more pullbacks this year and possibly a correction, the technical term for when a stock market index like the S&P 500 falls 10 percent or more. Three months ago, analysts at Goldman Sachs said there was roughly a 60 percent chance that a correction would happen this year.

Monday's slide moved the market closer to possibility.

Among other negative signs for the market: In 2013, the Dow had only one 300-point-plus down day. It's had two 300-plus drops in 2014, just months in.

"I think we are in correction phase and the bias will be to the downside for a while longer," said Frank Davis, director of trading at LEK Securities. "It would make sense to see a healthy pullback after last year. Air has to come out of the market."

All 10 sectors in the S&P 500 index fell, and telecommunications stocks posted the biggest declines, weighed down by AT&T and Verizon Communications.

Mattel fell $1.79, or 4.7 percent, to $36.05. The world's largest maker of toys reported on Friday that sales of Barbie and Fisher-Price preschool items dropped in its fourth quarter.

Also among the decliners: Jos. A Bank Clothiers, which fell $2.83, or 5 percent, to $53.39 on continued doubts that a takeover bid by rival clothier Men's Wearhouse will go through. The two retailers have been dueling since October when Jos. A. Bank offered $2.3 billion for Men's Wearhouse.

A few stocks posted gains.

Pfizer rose 20 cents, or 0.7 percent, to $30.60, after the company reported that a mid-stage study of an experimental drug for advanced breast cancer met the main goals. The drug is seen as a potential huge seller. Pfizer was the only stock to rise among the 30 members of the Dow.

Comments
The Latest: IS claims responsibility for Afghan bombing

The Latest: IS claims responsibility for Afghan bombing

Islamic State group claims responsibility for suicide bombing attack in Afghanistan's capital Kabul.
Updated: 5 minutes ago

US remains unbeaten in Basketball World Cup qualifying

Rodney Purvis scores 14 points as US beats Cuba 84-48 to remain unbeaten in qualifying for 2019 Basketball World Cup
Updated: 5 minutes ago

Islamic State group in statement on website claims responsibility for suicide bombing attack in Afghan capital

Islamic State group in statement on website claims responsibility for suicide bombing attack in Afghan capital
Updated: 11 minutes ago

AP Top News at 1:42 a.m. EST

AP Top News at 1:42 a.m. EST
Updated: 14 minutes ago
Ledecka gets second Olympic gold, this time in snowboarding

Ledecka gets second Olympic gold, this time in snowboarding

Ester Ledecka won the second leg of an unheard-of Olympic double, taking the gold medal in snowboarding's parallel giant slalom Saturday to go to her surprise win in the Alpine super-G earlier in the games.
Updated: 14 minutes ago
Official: Suicide bomber kills 1 in diplomatic area in Kabul

Official: Suicide bomber kills 1 in diplomatic area in Kabul

An Afghan official says a suicide bomber killed at least one person in an attack in the diplomatic area of Afghanistan's capital
Updated: 21 minutes ago
Official: Suicide bomber kills 1 in diplomatic area in Kabul

Official: Suicide bomber kills 1 in diplomatic area in Kabul

An Afghan official says a suicide bomber killed at least one person in an attack in the diplomatic area of Afghanistan's capital
Updated: 21 minutes ago

Friday's Scores

Friday's Scores
Updated: 25 minutes ago
Karlsson nets two goals, Vegas beats Canucks, 6-3

Karlsson nets two goals, Vegas beats Canucks, 6-3

William Karlsson scored two goals and Reilly Smith had three assists Friday night to lead the Vegas Golden Knights to a 6-3 victory over the Vancouver Canucks
Updated: 1 hour ago
As deadly shells fall, fear spreads anew in Syrian capital

As deadly shells fall, fear spreads anew in Syrian capital

As the Syrian government escalates attacks on opposition-held suburbs of Damascus, rebels in outlying towns are retaliating with mortar shells and rockets, killing more than 25 civilians in the past two weeks
Updated: 1 hour ago