Published September 20, 2012
FOX Business: Capitalism Lives Here
Wall Street fell solidly into the red Thursday on data showing weakness across several of the world's biggest economies.
As of 11:15 a.m. ET, the Dow Jones Industrial Average fell 24.3 points, or 0.18%, to 13554, the S&P 500 dipped 5.1 points, or 0.35%, to 1456 and the Nasdaq Composite slumped 11.7 points, or 0.37%, to 3171.
Manufacturing in China, the world's No. 2 economy, contracted for the eleventh month in a row in September, according to a report from HSBC. However, the pace of the contraction slowed down to its lowest level in two months.
"China’s manufacturing growth is still slowing, but the pace of slowdown is stabilizing," Hongbin Qu, the bank's chief economist for China, wrote in the report. Qu notes that new easing measures taken on by Beijing should "lead to a modest improvement" from the fourth quarter onward.
Separate data from Markit showed the manufacturing slump in the eurozone deepening in September to its worst level since June 2009. Germany, the currency bloc's biggest economy, actually saw an uptick that brought its contraction to the slowest pace in five months. However, France, the eurozone's second-biggest economy, saw its factory sector shrinking at its fast pace in nearly three and a half years.
The report "highlights the fact that we have a big divergence in outcomes across the whole eurozone," Peter Dixon, a strategist at Commerzbank, said in an interview with FOX Business. "The worry is that we now have France going in reverse. If we see France contract … we’ll have a problem for the eurozone as a whole."
Markit's gauge of U.S. manufacturing activity showed the sector continued expanding, but at a very sluggish pace in September. Separately, the Philadelphia Federal Reserve's gauge of manufacturing activity in the mid-Atlantic region rose to -1.9 in September from -7.1 in August, surpassing estimates of a reading of -4. Readings above zero point to expansion, while those below zero point to contraction.
The Labor Department said new claims for unemployment benefits fell to 382,000 last week from an upwardly revised 385,000 the week prior. Claims were expected to fall to 375,000 from an initially reported 382,000.
In commodities, oil prices have tumbled 7.1% in a three-day selloff. Worries that U.S. supplies are running high and speculation that Saudi Arabia may act to reduce the price of crude have weighed heavily. The benchmark contract traded in New York dipped 27 cents, 0.28%, to $91.72 a barrel. Wholesale New York Harbor gasoline, meanwhile, rallied 1.2% to $2.86 a gallon.
Gold fell $8.70, or 0.49%, to $1,763 a troy ounce.
The Euro Stoxx 50 dipped 0.88% to 2545, the English FTSE 100 fell 0.64% to 5851 and the German DAX slumped 0.38% to 7362.
In Asia, the Japanese Nikkei 225 sold off by 1.6% to 9087 and the Chinese Hang Seng fell 1.2% to 20591.