US stocks tumble on global growth fears

United States stocks tumbled early Thursday, following European and Japanese equities sharply lower on worries about slowing global growth.

The AFP reported that about 60 minutes into trade, the Dow Jones Industrial Average was at 16,045.86, down 234.03 points (1.44 per cent).

The broad-based S&P 500 fell 23.99 (1.24 per cent) to 1,914.77, while the tech-rich Nasdaq Composite Index sank 65.31 (1.37 per cent) to 4,687.44.

The early losses threatened to produce the third straight down day for US stocks. Poor Chinese economic data and weak prices of key commodities like copper and oil have dampened the mood on Wall Street. analyst Patrick O’Hare said moves by central banks in Norway and Taiwan to cut interest rates were another dreary accommodation to low growth.

“It’s kind of hard to believe after all of the policy accommodation that has been provided since late-2008, and yet here the central banks are still feeling compelled to do more because growth is still weak and thought to be at risk of getting weaker due to China’s slowdown and the ongoing slump in commodity prices,” O’Hare said.

New orders for US durable manufactured goods fell 2.0 per cent in August, according to Commerce Department data. The drop “is suggestive of a manufacturing sector that is stalling,” O’Hare said.

Dow member Caterpillar plunged 7.0 per cent after announcing a major cost-cutting program in response to the downturn in the energy and mining industries. Caterpillar could cut more than 10,000 jobs and 20 facilities through 2018.

Large bank equities fell, with Bank of America, Dow member JPMorgan Chase and Wells Fargo all down around 1.7 per cent.

Technology shares were also generally weak, with Apple falling 1.5 per cent, Facebook 1.7 per cent and Intel 2.8 per cent.

Consultancy Accenture dipped 0.5 per cent as it projected sales in the current quarter of $7.70-$7.95bn, below the $8.11bn expected by Wall Street analysts.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.09 per cent from 2.15 per cent Wednesday, while the 30-year dropped to 2.88 per cent from 2.95 per cent. Bond prices and yields move inversely.

Source : Punch

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