NEW YORK (AP) — Signs that China’s economy is weakening and Europe is slowing hurt U.S. stock prices.
Oil prices dropped 2.4 percent to their lowest level in a week after the reports of a possible global slowdown. That hurt oil stocks: Alpha Natural Resources, Consol Energy, Cabot Oil & Gas Corp. and Halliburton were all down 4 percent.
The disconcerting news from overseas Thursday overshadowed reports showing the U.S. economy is gaining momentum.
The Dow Jones industrial average fell 66 points to 13,058 at noon Thursday. The Standard & Poor’s 500 index fell nine points to 1,393, while the Nasdaq composite fell 11 points to 3,063.
Nine out of 10 sectors fell in the S&P 500, led by energy and materials.
China has recently released a string of worrisome reports, the latest on Thursday, signaling that its manufacturing sector is contracting. A manufacturing index compiled by HSBC fell to 48.1 in March from 49.6 in February. Figures below 50 indicate that manufacturing is contracting.
That’s a negative sign because growth in China has played a key role in shoring up the global economy since the financial crisis of 2008.
China is also the world’s largest consumer of materials, so a slowdown there would affect U.S. materials companies. US Steel Corp. fell 4 percent, and copper wire and bar manufacturer Freeport-McMoRan Copper Gold Inc. lost 3.5 percent.
It didn’t help that another survey in Europe also showed signs that the economy there was also slowing. The purchasing managers index from Markit, a financial information company, fell to a below-forecast 48.8 points in March from 49.3 a month earlier. The index combines both the services and manufacturing sectors.
Those signs of a slowdown in key global markets dwarfed the latest positive news on the U.S. economy. The number of Americans seeking unemployment benefits fell 5,000 to a four-year low last week, bolstering the view that the job market is strengthening. A measure of future U.S. economic activity, the Conference Board’s index of leading economic indicators, rose 0.7 percent in February for the fifth straight month, more evidence that the economy is gaining momentum.
The poor economic news from abroad also hurt FedEx Corp.’s stock, which fell 4 percent. Chief financial officer Alan Graf said the current economic environment and higher fuel prices are driving more customers to “trade down” or choose slower methods of shipping to save money, just like they did during the recession. His comments dwarfed news that its quarterly profit more than doubled between December and February after it shipped more packages and charged higher prices.
While news out of China has been bad for stocks, it may provide some relief to consumers with oil prices falling. Gasoline has risen 59 cents per gallon since Jan. 1 and the average price nationwide is above $4 in at least eight states, plus the District of Columbia.
In other corporate news:
— Watson Pharmaceuticals Inc. jumped 3.6 percent on reports the generic drugmaker is in talks to buy European counterpart Actavis for about $7 billion.
— Discover Financial Services stock rose 4 percent, a day after it reported a 36 percent jump in its first-quarter profit. Customers used its credit card more and racked up higher balances but also improved their payment habits.
— Shares of Vantiv Inc. rose in their first day of trading on the New York Stock Exchange. Formerly a unit of Fifth Third Bank, the payment processor’s stock rose 14 percent.