Friday, March 7, 2014
By Alex Veiga
The Associated Press
For investors, February is starting out just as rough as January.
Traders work on the floor of the New York Stock Exchange on Friday, when markets ended the worst January since 2009.
The Associated Press
U.S. stocks tumbled 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 followed 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 2½ 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 U.S. weather emerged as a 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.
“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.”