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Monday, September 22, 2014

Housing data hits Wall Street; S&P has worst day since Aug 5

US stocks closed lower today, with the S&P 500 suffering its biggest one-day decline since early August, as the latest housing data came in much weaker than expected, raising new concerns about the rate of growth in the economy.

Equities were also pressured after China's finance minister indicated the country would not increase stimulus measures in response to some weak data of its own.

Existing home sales fell 1.8 percent in August, far from the growth of 1 percent that had been expected. An index of housing shares lost 2 percent as one of the weakest sectors on the day. Among specific stocks, D. R. Horton lost 2.6 percent to $21.37, while Beazer Homes was off 2.8 percent at $18.09 and Toll Brothers shed 3.1 percent to $32.41.

In China, Finance Minister Lou Jiwei said the country would not dramatically alter its economic policy because of any one economic indicator. The comments come as recent data has been weak, leading many analysts to lower their growth forecasts for the country.

The Bank of New York Mellon's index of Chinese American Depositary Receipts fell 2.1 percent.

The Dow Jones industrial average fell 107.06 points, or 0.62 percent, to 17,172.68, the S&P 500 lost 16.11 points, or 0.8 percent, to 1,994.29 and the Nasdaq Composite dropped 52.10 points, or 1.14 percent, to 4,527.69. The day marked the biggest one-day decline for the S&P since Aug. 5, and the biggest for the Nasdaq since July 31.

European shares also fell today, with a benchmark index retreating from the previous session's near-seven-year high, as concern over the pace of growth in China knocked down mining heavyweights such as Rio Tinto and BHP Billiton.

Shares in Air France-KLM sank 4 percent after the main French pilots union rejected a management proposal for ending a week-old Air France strike. The company said the strike was costing it as much as 20 million euros ($25.7 million) a day.

UK supermarket chain Tesco also featured among Europe's top losers, sinking 10.2 percent after the group slashed its earnings forecast - its third warning this year - after finding a fault in its accounts.

Shares in Air France-KLM sank 5.2 percent after the main French pilots union rejected a management proposal for ending a week-old Air France strike. The company said the strike was costing it as much as 20 million euros ($25.7 million) a day.

UK supermarket chain Tesco also featured among Europe's top losers, tumbling 11.6 percent after the group slashed its earnings forecast - its third warning this year - after finding a fault in its accounts.

Shares in Tesco's rivals also took a beating, with J. Sainsbury down 1.9 percent and Morrisons down 1.7 percent.

The FTSEurofirst 300 index of top European shares ended down 0.6 percent at 1,393.54 points. The index had climbed to near a seven-year high on Friday after Scotland voted against independence.

The index briefly trimmed its losses in afternoon trading after European Central Bank President Mario Draghi said the ECB stands ready to use additional unconventional tools to spur inflation and growth in the euro zone.

Meanwhile, Japan's Nikkei share average dropped today as investors booked gains in heavyweight Softbank after the listing of Alibaba Group Holding Ltd , but the broader market held firmer near six-year high.

The Nikkei declined 0.7 percent to 16,205.90, with a 6.1 percent slide in Softbank shares accounting for more than a half of the benchmark's fall.

Softbank, which holds a 32 percent stake in Alibaba, had surged 30 percent over the past six weeks in anticipation of the Chinese e-commerce company's listing in the New York Stock Exchange.

The broader market was firmer, with the Topix down just 0.1 percent at 1,330.88, sticking near a six-year high hit on Friday, while the new JPX-Nikkei Index 400 was flat at 12,088.93.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  





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