Stocks Dip Early Tuesday 01/22 09:30
Stocks across the world slipped Tuesday morning as investors again grow
concerned about signs the global economy is weakening.
NEW YORK (AP) -- Stocks across the world slipped Tuesday morning as
investors again grow concerned about signs the global economy is weakening. The
International Monetary Fund trimmed its economic forecasts for 2019 and 2020
and pointed to risks including trade tensions and rising interest rates.
China's government said its economy grew in 2018 at the slowest pace since 1990.
Technology companies skidded, and so did industrial companies, which were
hurt by the slower growth forecast as well as some weak fourth-quarter earnings.
KEEPING SCORE: The S&P 500 index lost 27 points, or 1 percent, to 2,643 as
of 10:10 a.m. Eastern time. The Dow Jones Industrial Average slid 207 points,
or 0.8 percent, to 24,498. The Nasdaq composite fell 83 points, or 1.2 percent,
to 7,074. The Russell 2000 index of smaller-company stocks dropped 18 points,
or 1.3 percent, to 1,463.
Stocks in Europe and Asia took similar losses. But even with the decline
Tuesday, the S&P 500 has jumped more than 12 percent since hitting its recent
low on Dec. 24. It's on a four-week winning streak as investors have concluded
a slowdown in the world economy might not be as painful as they feared last
GLOBAL GROWTH: The IMF is now says the global economy will grow 3.5 percent
this year, down from its previous forecast of 3.7 percent. Managing Director
Christine Lagarde said the global economy was growing more slowly than expected
as risks increase. She also said the bank cut its estimate for growth in 2020
to 3.6 percent from 3.7 percent.
Earlier in the day, China reported its economy expanded by 6.6 percent in
2018. This was the slowest pace of growth since 1990 and it fueled fears a
trade dispute with Washington is putting a drag on the world's second largest
Technology and industrial companies took some of the worst losses.
Construction and mining equipment maker Caterpillar shed 2.5 percent to $133.20
and farm equipment company Deere fell 2.9 percent to $159.96. Among technology
companies, chipmakers absorbed sharp losses. Nvidia fell 3.8 percent to $151
and Texas Instruments lost 2.3 percent to $97.11.
ANALYSIS: "The IMF's prognosis is fairly dire, and the prescription is a
sensible approach of preventive management; to avoid escalating trade disputes,
lower tariffs and build fiscal or financial buffers," wrote Vishnu Varathan of
Mizuho Bank in a note to clients.
PLACE YOUR BID: eBay surged 8.4 percent to $33.61 after activist investment
firm Elliott Management disclosed a 4 percent stake in the online marketplace
and pushed it to make changes. It said eBay's classifieds and StubHub ticket
resale division are both struggling, and eBay should consider separating them
from its marketplace business.
METAL MELTDOWN: Aluminum products maker Arconic slumped 16.9 percent to
$16.91 after it said it is no longer considering a sale. Formerly a part of
aluminum giant Alcoa, Arconic said it didn't receive any offers it thought were
in its best interests. The stock has gyrated over the last few months following
reports the company was considering a sale.
Power tools maker Stanley Black and Decker sank 14.2 percent to 117.43 after
its forecast for 2019 fell short of Wall Street estimates.
BREXIT PLAN: British Prime Minister Theresa May presented her Plan B for
Britain's exit from the European Union on Monday, but it looks a lot like the
original and it's not clear if she can win approval in Parliament. May said she
will get more opinions on a widely-criticized "backstop" in the plan, aimed at
preventing a hard border between the Republic of Ireland, part of the EU, and
the U.K's Northern Ireland after Brexit. She will then "take the conclusions of
those discussions back to the EU." The bloc has said it will not renegotiate
the divorce deal, which was resoundingly rejected by Parliament last week.
Britain is scheduled to leave the European Union in a little more than two
months, and if it departs without a trade deal it could cause major hardships
for numerous companies, especially banks.
ENERGY: U.S. crude lost 3.3 percent to $52.02 a barrel in New York. Brent
crude, used to price international oils, dropped 2.3 percent to $61.30 a barrel
in London. Natural gas dropped 9.5 percent to $3.15 per 1,000 cubic feet.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.75
percent from 2.78 percent.
OVERSEAS: The British FTSE 100 index slid 0.9 percent. Germany's DAX and the
French CAC 40 both gave up 0.6 percent.
Japan's Nikkei 225 index shed 0.5 percent and the Kospi in South Korea sank
0.3 percent. Hong Kong's Hang Seng lost 0.7 percent.