Wall Street lost ground for the second consecutive session Monday on concerns consumers could slow an economic recovery. Significant falls in markets across the globe earlier in the day also gave reason for pessimism.
In economic news, a measure of manufacturing activity in the New York area climbed from negative 0.6 in July to positive 12.1 in August. Any positive reading from the Empire State Manufacturing survey shows expansion.
The Dow Jones dropped 186.06 points, or 2%, to 9,135.34, the S&P's 500 shed 24.36 points, or 2.43%, to 979.73 and the NASDAQ fell 54.68 points, or 2.75%, to 1,930.84.
Financials slumped with Wells Fargo, Bank of America and JPMorgan shedding 5.2%, 4.8% and 4.1% respectively.
Morgan Stanley and Goldman Sachs fell 4.2% and 3.4%, while Citigroup was down 1%.
American Express dropped 4.2%.
Home improvement retailer Lowe’s sank 10.3% after reporting a worse-than-expected fall in second quarter profit. The company also gave an outlook for the second half that fell short of analysts expectations.
Home Depot lost 3.8%.
Falls in tech stocks sent the NASDAQ tumbling. Apple, Microsoft and IBM shed 4.3%, 1.9% and 1.4%.
Oracle and Hewlett-Packard retreated 2.6% and 2.2%, while search engines Google and Yahoo! fell 3.3% and 3.2%.
Energy stocks tracked the price of crude lower. ConocPhillips sank 3.2%, while Exxon Mobil and Chevron lost 2.4% and 2%.
Other major losses for the day were aluminium producer Alcoa, which slumped 6.5%, and machinery makers Deere & Co and Caterpillar, which were down 4.6% and 4.5%.
NYMEX light crude oil for September delivery fell US76c to settle at US$66.75 a barrel.
COMEX gold for December delivery fell US$12.90 to settle at US$935.80 an ounce.
European Markets
European stocks fell to more than two week lows on profit taking. Banks sank as miners lost ground due to falling metals prices.
The UK benchmark FTSE 100 lost 68.96, or 1.46% to 4,645.01. The German DAX shed 107.50, or 2.02% to 5,201.61, while the French CAC40 fell 75.58, or 2.16% to 3,419.69.
Financials took the most points off the index. Barclays, Lloyds and Standard Chartered dropped 3.4%, 4.5% and 2.6% respectively.
Societe Generale and BNP Paribas lost 2.1% and 1.9%. Germany’s Deutsche Bank and Commerzbank slid 1.2% and 1.9%.
Insurers Allianz, AXA and Prudential shed 2.7%, 2.4% and 3.2%. Aviva bucked the trend with a 1.6% gain following a broker upgrade.
The world’s largest miner BHP Billiton dropped 3.2%. Aussie peer Rio Tinto sank 4.7%, while Xstrata, and Antofagasta were down between 4.2% and 5.6%.
Oil producers Total, BG Group and BP slid 2.2%, 1.1% and 1%. Royal Dutch Shell lost 0.8%.
Automaker Volkswagen continued its recent slump with a 9.9% fall. Renault and Peugeot shed 2.7% and 2.3%, while Porsche added 3.1%.
Japanese Markets
Japan’s Nikkei had its biggest one-day fall since March on the release of worse than expected gross domestic product figures. Exporters struggled as the value of the yen climbed.
Japan’s GDP expanded at an annual 3.7% in the three months to June 30. This was below analyst’s forecasts after GDP was down a revised 11.7% the previous quarter.
The Nikkei 225 sank 328.72, or 3.10% to 10,268.61.
Sony slumped 4.1%, while handheld game console maker Nintendo shed 2.6%.
Nissan lost 3.4%.
Sumitomo Realty & Development sank 5.8% on the back of a fall in housing investment. Leopalace21 Corp fell 5.1%.
Oil producers dropped with the price of crude. Nippon Oil closed 4.2% lower, while TonenGeneral Sekiyu K.K. lost 3.1% after forecasting a loss for the year.
Mitsubishi Corp weakened 3.6%.
Computer-services provider CSK Holdings sank 8.4% after reporting a net loss for the quarter.
Hong Kong Markets
The Hang Seng recorded its biggest one-day decline 4 months Monday. Stocks focused on China, retailers and the banks led the market sell-off as 40 of the 42 member index lost ground.
The Hang Seng slumped 755.68, or 3.62% to 20,137.65.
HSBC, which makes up about one-third of the Hang Seng index sank 3%, while Bank of China slumped 3.9% and Bank of Communications retreated 3.2%.
Stocks dually listed on the Shanghai stock exchange were markedly worse-off than the Hang Seng.
Retail exporters were lower. Li & Fung, which is the largest supplier of clothes and toys to Wal-Mart lost 3.8%. Yue Yuen Industrial Holdings, the world’s largest branded shoe-maker was 3.5% below the line.
Esprit was off 6.4%.
Airliners were suspended with reports Air China would buy up to 13% of Cathay Pacific.
Meanwhile, Chinalco and China Shenhua Energy Co lost 6.5% and 6.4% respectively.
Oil producers were also off, with Cnooc and PetroChina losing 4.7% and 5%.
Jiangxi Copper slumped 7.5%.
