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Traders work on the floor of the New York Stock Exchange. Photo: Getty -
A trader works on the floor of the New York Stock Exchange. Photo: Getty
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This story was updated at 4:10 p.m. EDT.
U.S. stocks closed with a sizable loss Tuesday
after weak economic data in China and Europe reignited worries about
global growth, while oil prices dropped for a second day, dragging down
energy shares.
Activity in China's factories shrank for the
14th straight month in April as demand stagnated, a private survey
showed. Britain's manufacturing output also unexpectedly dropped last
month to its lowest level in three years.
U.S. oil prices settled down 2.5 percent as
rising output from the Middle East renewed concerns about global
oversupply. The S&P energy index, down 2.4 percent, led declines in
the benchmark index.
"Equities are in search of a catalyst, and at
the moment lack one," said Mark Luschini, chief investment strategist at
Janney Montgomery Scott in Philadelphia.
The Dow Jones Industrial Average closed the
day down 140 points, or 1 percent, at 17,751, working off some of the
220-point drop seen at the low point of the day. The broader S&P 500
index was off 18 points, or 1 percent, to 2,063 at the close, and the
Nasdaq composite was down 54 points, or 1 percent, at 4,763.
Shares of Apple Inc. bucked the market’s
downward trend and closed up 2 percent at $95, rising for the first time
in more than a week, one day after CEO Tim Cook sought to assuage investors’ fears about the company after billionaire activist investor Carl Icahn’s decision last week to sell his entire stake in Apple, citing the risk of China's influence on the stock.
Cook told CNBC Monday that the next generation
of iPhones will persuade current iPhone users to upgrade when the
device is released. Apple’ stock price is down 9 percent so far this
year.
Earlier, Australia's central bank also sprang a
surprise by cutting interest rates to a record low of 1.75 percent. The
majority of economists surveyed by Reuters had expected no change.
Recovering oil prices and an accommodative
Federal Reserve have helped the S&P 500 rise by about 14 percent
since mid-February. However, the index faltered last week, weighed down
by lackluster earnings and mixed economic data.
While first-quarter earnings from S&P 500
companies have mostly beaten analysts' expectations, they are still
expected to fall 5.7 percent from a year ago, according to Thomson
Reuters data.
The Fed held monetary policy steady last week
after raising interest rates in December for the first time in nearly a
decade. While the central bank kept the door open to a hike in June, it
gave no signal that it was in a hurry to tighten further.
Investors will be keeping an eye on U.S.
unemployment numbers at the end of the week for signs confirming that
the labor market continues to gain in strength.
Shares of drugmaker Pfizer were up 3 percent at $34 after the company reported a rise in quarterly revenue.
American International Group fell 1 percent to $56 after reporting a lower-than-expected profit for the third straight quarter.
Drugmaker Mylan was up 2 percent at $44, after
posting a 17 percent rise in quarterly revenue, helped by higher
generic drug sales.
Data from Reuters were used to report this story.
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