US stocks sold off amid a global selloff weighed down by a new round of worries over Greece defaulting on its loans and fears over a crackdown by China’s government on stock market borrowing in the country.
News that talks between Greece and its lenders were making little progress weighed European stocks down on Friday with the ripple effects being felt across the Atlantic in the US.
China’s market watchdog warned investors to be careful as Chinese shares advanced to seven year highs. Its benchmark Index slid more than 3.4% after fund managers were banned from lending stocks for short selling.
“We saw selling overseas, and that spilled over into the U.S. We’ve had a nice rally over the last few weeks to the upper half of the trading range, and it’s moving back over,” Adam Sarhan, chief executive of Sarhan Capital in New York, told Reuters.
“It’s still too early to tell what earnings are going to be for the quarter, but there haven’t been that many upside surprises. And that’s what we need to see.”
In the US, the selling was also fed by disappointing first quarter results from several big companies.
The American Express slipped 4.4% to a two year low after its quarterly sales missed revenue to pace declines in the S&P 50.
The S&P 500 index suffered its worst one day points decline in more than three weeks and ended the week in the red after two straight weeks of gains. The benchmark index fell 23.83 points or 1.1% on the day to close at 2,081.16 and record a 1% decline on the week.
The Dow Jones Industrial Average declined by more than 279 points or 1.5% to 17,826 points and close 1% down on the week while the Nasdaq Composite slid 1.5% on the day.
The declines in the blue chip index were also paced by big declines by Travelers Cos., 3M Co. and UnitedHealth Group Co. after disappointing First quarter earnings.
“We’re very early in the earnings season,” Steve Bombardiere, an equity trader at Conifer Securities LLC in New York, told Bloomberg.
“We need to get further into the season until we get some direction, so right now these little things in the background are good fodder for some short-term gut wrenching.”
To contact the reporter of the story: Jonathan Millet at firstname.lastname@example.org