- Oregonians flee in face of fast-moving wildfire as homes go up in blaze
- Eric Holder: ‘Racial animus’ fuels opposition to Obama and me
- Sgt. Bowe Bergdahl to return to active duty at Fort Sam Houston
- Israel says it’s downed drone along southern coast
- Despite offensive, Gaza rockets still hit Israel
- Extra-time goal gives Germany World Cup title over Argentina
- Strong quake hits Japan, triggering tsunami
- Sniper heaven: Pentagon’s self-guided bullets leave enemies nowhere to hide
- Violent gang taking advantage of immigration crisis, using border as recruiting hub
- Medicaid enrollment continues to soar under Obamacare, administration says
Stocks lower on worries over China slowdown
Question of the Day
NEW YORK (AP) — Signs that China's economy is weakening and Europe's is slowing hurt U.S. stock prices Thursday.
The Dow Jones industrial average was down 74 points to 13,050 in midafternoon trading. The Standard & Poor's 500 index fell 10 points to 1,392, while the Nasdaq composite fell 14 points to 3,061.
Nine out of 10 sectors fell in the S&P 500, led by energy and materials.
The disconcerting news from overseas Thursday overshadowed reports showing the U.S. economy is gaining momentum.
China recently released a string of worrisome reports, the latest on Thursday, signaling that its manufacturing sector is contracting. A manufacturing index compiled by HSBC fell to 48.1 in March from 49.6 in February. Figures below 50 indicate that manufacturing is contracting.
That's a negative sign because growth in China has played a key role in shoring up the global economy since the financial crisis of 2008.
China is also the world's largest consumer of raw materials, so a slowdown there would affect those companies. United States Steel Corp. fell 4 percent, and copper wire and bar manufacturer Freeport-McMoRan Copper Gold Inc. lost 3.5 percent.
It didn't help that another survey in Europe also showed signs that the economy there was also slowing. The purchasing managers' index from Markit, a financial information company, fell to a below-forecast 48.8 points in March from 49.3 a month earlier. The index combines both the services and manufacturing sectors.
Those signs of a slowdown in key global markets dwarfed the latest positive news on the U.S. economy. The number of Americans seeking unemployment benefits fell 5,000 to a four-year low last week, bolstering the view that the job market is strengthening. A measure of future U.S. economic activity, the Conference Board's index of leading economic indicators, rose 0.7 percent in February for the fifth straight month, more evidence that the economy is gaining momentum.
The poor economic news from abroad also hurt FedEx Corp.'s stock, which fell 4 percent. Chief Financial Officer Alan Graf said the current economic environment and higher fuel prices are driving more customers to "trade down" or choose slower methods of shipping to save money, just as they did during the recession.
Investors decided to focus on Mr. Graf's comments, rather than the company's stellar performance. FedEx's quarterly profit more than doubled between December and February after it shipped more packages and charged higher prices.
Oil prices dropped 2.4 percent to their lowest level in a week after the reports of a possible global slowdown. That hurt oil stocks: Alpha Natural Resources, Consol Energy, Cabot Oil & Gas Corp. and Halliburton were all down 4 percent.
While news out of China has been bad for stocks, it may provide some relief to consumers with oil prices falling. Gasoline has risen 59 cents per gallon since Jan. 1, and the average price nationwide is above $4 in at least eight states, plus the District of Columbia.
It was a good day for IPOs. Payment processor Vantiv Inc. soared 17 percent in its first day of trading on the New York Stock Exchange, while email marketer ExactTarget Inc. rocketed up 30 percent on its first day of trading.
In other corporate news:
• Watson Pharmaceuticals Inc. jumped 4 percent on reports the generic drugmaker is in talks to buy European counterpart Actavis for about $7 billion.
• Discover Financial Services stock rose 4.4 percent, a day after it reported a 36 percent jump in its first-quarter profit. Customers used its credit card more and racked up higher balances but also improved their payment habits.
TWT Video Picks
By Robert N. Tracci
Congress must use its appropriations power to secure the border
- DOJ investigates Nebraska parade float critical of Obama
- Agency scrubs Malia Obama photos at White House's request: report
- A 'new Cold War': China's top paper warns of 'slippery slope' towards conflict with U.S.
- Violent gang MS-13 taking advantage of immigration crisis, using border as recruiting hub
- Emeryville, Calif., police chief: Guns aren't for defense
- Islamic State leader Abu Bakr al-Baghdadi formerly a U.S. captive
- KUHNER: Will Russia-Ukraine be Europe's next war?
- Germany wins World Cup title on Mario Goetze goal in extra time
- Obama's 'blank check' rejected as border solution
- New York City creates ID card so 500K illegal immigrants can get services
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq
World Cup's sexiest WAGs