US Stocks Drop After China Economic Policy Comments

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US Stocks Drop after China Economic Policy Comments

On Monday, US stocks traded lower after the finance minister of China indicated that the country would not increase the stimulus measures while the housing data dropped below the expectations.

Lou Jiwei, Finance Minister said that China is not going to change its economic policy drastically because of any individual economic indicator.

Reuters quotes managing director of Janlyn Capital LLC, Andre Bakhos as having said, “With China’s statements not defining clear hurdles for stimulus, the market is grappling to guess which data point will tip the hand that controls the purse strings.”

The existing sales for homes in US dropped1.8% to the annual rate around 5.05 million units after four months of surges, as announced by the National Association of Realtors.

The Dow Jones Industrial Average dropped 0.18% or 31.82 points to 17,247.92 while the S&P 500 dropped 0.4% or 8.02 points to 2,002.38. The Nasdaq Composite Index dropped 0.59% or 27.07 points to 4,552.72.

According to Market Watch, treasury gained as investors were seeking safety and the prices of metals suffered a sharp drop.

Sigma-Aldrich shares gained 34% to $137.13, to become the best performing stocks on the S&P 500 after Merck KGaA, German drugs and chemicals maker agreed to purchase Sigma-Aldrich for $17 billion.

Yahoo shares dropped to $39.44 by 3.6%. Bank of America and Bernstein downgraded the stock amid the debut of Alibaba on Friday. Alibaba shares dropped 3.1% to $90.90.

Kemet was among the biggest gainers on percentage on the New York Stock Exchange after gaining 12.4% after its Q2 outlook. The largest decliner in percentage was CARBO Ceramics, dropping 17.86%.

On Nasdaq, Chainanet Online, Yahoo, rose 76.3% to $3.46 while Apple rose 0.4% to $101.34.

The declining issues outnumbered the advancing issues on the New York Stock Exchange by 2,256 to 580 in a ration of 3.89:1 on the downside. On Nasdaq, 1880 issues dropped and 630 advanced in a 2.98:1 ratio, which favored the decliners.

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To contact the reporter of the story: Jonathan Millet at john@forexminute.com