65° Good Morning
65° Good Morning

Stocks retreat on worry over China economic slowdown

Stocks slid Tuesday, May 3, 2016. These traders

Stocks slid Tuesday, May 3, 2016. These traders work on Friday, April 29, 2016 on the floor of the New York Stock Exchange. Credit: Bloomberg News / Michael Nagle

More weakness in Chinese manufacturing weighed on U.S. and European financial markets on Tuesday, renewing concerns that the world’s second-largest economy is slowing down. Those fears were compounded after European officials cut back their growth forecasts for that region’s struggling economy.

AT THE CLOSE ON WALL STREET: The Dow Jones industrial average was down 140.3 points, about 0.8 percent, at 17,750.9. The Standard & Poor’s 500 index lost 18.1 points, about 0.9 percent, to 2,063.4. The Nasdaq composite fell 54.4 points, about 1.1 percent, to 4,763.2.

CRUDE ENERGY: As the markets closed, the price of benchmark U.S. crude oil was down 76 cents at $44.02 a barrel in electronic trading on the New York Mercantile Exchange. In London, Brent crude, the international standard, was down 53 cents at $45.30 a barrel.

CHINA WORRIES: European stock markets have edged down after weak Chinese manufacturing figures stoked renewed concerns over the state of the world’s No. 2 economy.

The Caixin magazine’s purchasing managers’ index for the manufacturing sector declined to 49.4 points from March’s 49.7 on a 100-point scale on which numbers below 50 show activity contracting. Worries over the state of the Chinese economy were largely responsible for the turmoil in global financial markets in the early part of the year, and the weak survey resonated round the world.

ANALYST OPINION: “Investors would appear to be wondering whether China data is signaling renewed weakness,” said analyst Mike van Dulken, head of research at Accendo Markets.

WEAKNESS IN EUROPE: European officials trimmed their economic growth forecasts for the 19 countries that share the euro currency, citing an unpredictable global outlook marked by political uncertainty and weakness in emerging markets. Although Europe’s economy was surprisingly strong in the first quarter, when it regained the size it was before the 2008 financial crisis, EU Commissioner Pierre Moscovici said the recovery “remains uneven.”

More news