NEW YORK (AP) â¿¿ Signs that China's economy is weakening and Europe is slowing sent U.S. stocks lower.
The price of crude oil dropped 2 percent Thursday to its lowest level in a week. That hurt oil stocks: Alpha Natural Resources, Consol Energy, and Noble Energy each fell 4 percent.
The disconcerting economic news from overseas overshadowed other reports that suggested the U.S. economy is gaining momentum.The Dow Jones industrial average closed down 78.48 points, or 0.6 percent, at 13,046.14. The Standard & Poor's 500 index fell 10.11, or 0.7 percent, at 1,392.78, while the Nasdaq composite index fell 12 points, or 0.4 percent to 3,063.32. Eight out of 10 sectors declined in the S&P 500, led by energy and materials as investors worried about a drop in global demand for oil and raw materials. China has released a string of worrisome economic reports recently. The latest, on Thursday, signaled that its manufacturing sector could be 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 raw materials, so a slowdown there would affect those companies. US Steel Corp. tumbled 5.82 percent, and copper wire and bar manufacturer Freeport-McMoRan Copper Gold Inc. lost 3.7 percent. It didn't help that another survey in Europe also pointed to slower growth. 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 in Europe. Those signs of a deceleration 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.