Stocks slide on worries over China, U.S. earnings
By BERNARD CONDON
the associated press | January 24,2014
Robert Stabile looks at his screens as he works on the floor of the New York Stock Exchange, Thursday.
NEW YORK — U.S. stocks are falling broadly Thursday after a survey from China suggested that manufacturing in the world’s second-largest economy was contracting. Investors also were disappointed with some earnings and forecasts from U.S. companies. The Dow Jones industrial average was heading for its biggest loss since September.
KEEPING SCORE: The Dow was down 192 points, or 1.2 percent, at 16,182 as of 3:15 p.m. Eastern time. That was the worst percentage loss since Sept. 20. The Standard & Poor’s 500 lost 20 points, or 1.1 percent, to 1,825. The Nasdaq composite fell 36 points, or 0.9 percent, to 4,206. Nine out of ten stocks in the S&P 500 index fell.
CHINA WOES: HSBC’s survey of Chinese manufacturing fell to the lowest point since July and suggested that the country’s factory sector is shrinking. Earlier this week, China reported its slowest annual economic growth since 1999.
“Any kink in the growth story globally is going to give investors pause,” said James Dunigan, chief investment strategist at PNC Wealth Management. “The market at these levels is a bit skittish.”
MIXED RESULTS: Several U.S. companies fell after reporting their latest quarterly results, including KeyCorp, Johnson Controls and Jacobs Engineering. Of the 102 companies in the S&P 500 that have reported earnings so far, 65 percent have beaten analyst estimates, about the historical average, according to S&P Capital IQ.
LOSING ALTITUDE: United Continental fell $1.21, or 2.6 percent, to $47.86 after its prediction for revenue growth this quarter disappointed investors.
FLIGHT TO SAFETY: Worried investors poured money into U.S. government debt securities and gold. The yield on the 10-year Treasury note fell to 2.78 percent from 2.86 percent late Wednesday, the lowest since Nov. 29. The price of gold rose $23.70, or 1.9 percent, to $1,262.30 an ounce.
CEO OUT: American Eagle Outfitters dropped $1.10, or 8 percent, to $13.21 after announcing the unexpected departure of its CEO, Robert Hanson. The teen retailer had reported disappointing sales over the holiday season.
PHONE FUMBLE: Nokia plunged 76 cents, or 10 percent, to $6.93 after posting a fourth-quarter loss on falling handset sales. The mobile phone business is part of the device and services unit that the Finnish company has agreed to sell to Microsoft.
NETFLIX JUMP: Netflix surged $53.12, or 16 percent, to $386.85, the biggest gain in the S&P 500. After the closing bell Wednesday, the streaming video company reported fourth-quarter earnings had climbed six-fold and that it had added 2.3 million subscribers during the period.
MOVING FREIGHT: Union Pacific rose $4.80, or 3 percent, to $173.30 after reporting a 13 percent jump in fourth-quarter earnings that beat analyst forecasts.