US Stocks Drop on Global Worries

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US Stocks Drop on Global Worries

US stocks declined on Wednesday amid weak economic data which sparked worries over the condition of the global economy and signs came up of slowing activities in mergers.

The major indexes dropped more than 2% after the opening, sending the Nasdaq and the S&P 500 into negative territory for this year. The Dow Jones Industrial Average dropped into negative territory on Friday, as reported by Reuters.

There was concern over the plunging prices of oil and the potential impact of the weak global economy on US earnings. The spread of Ebola has also rattled the markets. The S&P 500 is headed for its sixth drop in the last eight sessions and has declined by almost 8% since its record high of September 18.

Data did not help the situation as it indicated a drop of US retail sales and producer prices in September. In addition, manufacturing activity was slowed in New York to the lowest pace from April.

Christiana Trust portfolio manager, Scott Armiger said, “The clincher is that some of the concerns about Europe and the other economies slowing down has reached our shores today with the retail sales number and the PPI number.”

He added, “It’s normal and it’s long overdue- markets can’t grind higher for that long without some sort of get back here.”

The Dow Jones Industrial Average dropped 1.67% or 272.71 points to 16,042.48 while the S&P 500 declined 1.67% or 31.28 points to 1,846.42. The Nasdaq Composite declined 1.38% or 58.49 points to 4,168.68.

As reported by The Wall Street Journal, Europe stocks tumbled and the German government bonds hit yet another record high. The DAX index of Germany dropped 2.9% while the CAC 40 of France declined 3.6%. The Stoxx Europe 600 Index dropped 3.2%.

The benchmark S&P 500 index reported 2 new highs of 52 weeks and 70 new lows while the Nasdaq Composite recorded 7 new highs and 225 new lows.

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