Wall Street opens on downward slide on economic slowdown fears

Traders work on the floor at the New York Stock Exchange September 18, 2019. — Reuters pic
Traders work on the floor at the New York Stock Exchange September 18, 2019. — Reuters pic

NEW YORK, Oct 2 — US stocks continued to fall at the markets’ open today, as disappointing employment data added to the gloom from a dismal manufacturing report yesterday.

Yesterday’s losses wiped out gains won in the third quarter by the benchmark Dow and S&P 500, and the downward slide continued.

The Dow Jones Industrial Average and the broad-based S&P 500 were down about one per cent about 10 minutes into the trading day at 26,294.57 and 2,909.12 respectively.

The tech-rich Nasdaq Composite Index lost another 1.1 per cent to 7,819.47.

The recession fears resurged after manufacturing data Tuesday showed a second straight month of contraction, and it was not helped by lower-than-expected gain in private hiring.

The report from the ADP payrolls services firm showed companies added 135,000 jobs in September but August’s big gain was revised sharply lower.

Patrick O’Hare of Briefing.com said investors are worked up because of concerns that the US economy cannot long withstand the slowdown in the global economy.

“In brief, market participants reacted to the idea that many stocks have gone too far, too fast, relative to underlying fundamentals, and with earnings prospects in question because of weakening economic growth,” he said in an analysis.

Among individual shares, Boeing dropped nearly 1.5 per cent after a report that the Federal Aviation Administration ordered inspections of its 737 NG aircraft for structural cracks.

This is on top of the struggles the company is facing getting its popular 737 MAX back in the skies after two deadly crashes.

All eyes will be on Boeing chief Dennis Muilenburg, who is due to deliver a speech in New York at 11:30 (1330 GMT).

Homebuilder Lennar Corp jumped 2.55 per cent after reporting better-than-expected profit, helped by low interest rates spurring demand for homes.

General Motors dropped another 3.6 per cent amid a three-week strike and layoff announcements.

But Johnson & Johnson gained 2.4 per cent after reaching a US$20 million settlement to avoid trial in Ohio over its role in the opioid crisis. — AFP

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