US stocks tumble on China data, mediocre earnings
Specialist Peter Giacchi, right, works on the floor of the New York Stock Exchange Thursday, Jan. 23, 2014. US stocks fell broadly Thursday after a survey from China suggested that manufacturing in the world’s second-largest economy was contracting. AP PHOTO/RICHARD DREW
NEW YORK—US stocks sank Thursday following a weak report on Chinese manufacturing activity and the latest batch of lackluster corporate earnings.
At the closing bell, the Dow Jones Industrial Average slumped 171.69 (1.05 percent) to 16,201.65.
The broad-based S&P 500 fell 16.02 (0.87 percent) to 1,828.84, while the tech-rich Nasdaq Composite Index fell 24.36 (0.57 percent) to 4,218.64.
Data suggested investors fled the equity market for US Treasuries, with the yield on the 10-year bond falling to 2.77 percent from 2.86 percent Wednesday.
HSBC’s China manufacturing sector purchasing managers index fell to 49.6, below the line between growth and contraction, raising concerns about the prospects for the world’s second largest economy.
The China report came amid a mixed batch of corporate earnings reports with strong earnings from Netflix offset by disappointing results from Lockheed Martin and others.
Michael James, managing director of equity trading at Wedbush Securities, said Thursday’s China data, while “disconcerting,” is “just one datapoint.”
Mace Blicksilver, director of Marblehead Asset Management, said Thursday’s trade could be a one-day blip or the start of a deeper retreat if the China data implies deeper economic problems.
“Only time will tell,” Blicksilver said.
