The broad indexes all saw 2% declines. The broad market has been quite strong this year, with the S&P 500 (SPX.X) hitting a record high last week, but investors were disappointed by a slower than expected economic growth rate in China and reported decline in confidence among home builders in the United States.
The National Bureau of Statistics of China said that its preliminary estimate for the country's GDP growth rate for 12 months through the end of the first quarter was 7.7%, which was a decline from a 7.9% growth rate for the previous quarter. The consensus among analysts polled by Thomson Reuters was for China's GDP growth rate at the end of the first quarter to be 8.0%.
Commodity prices plunged on Monday, Gold for June delivery on the COMEX dropping $140.30, or 9.3%, to $1,361.10 an ounce, with the China GDP number contributing to a hostile technical trading environment. Monday's epic slide followed a 5% drop for gold prices on Friday. Gold prices have declined by over $200 over the past two trading sessions. Monday's decline was the largest on a percentage basis since Feb. 28, 1983, when the price dropped 12.1%, according to Bloomberg data.Please see TheStreet's Gold Page for continuing coverage of this story. The continuing narrative of the U.S. housing recovery has led to a very strong overall market this year, especially for bank stocks, following a very solid 2012 for the banks. But on Monday, the National Association of Home Builders said that "increasing costs for building materials and rising concerns about the supply of developed lots and labor," were leading to a decline in confidence among home builders. The NAHB/Wells Fargo Housing Market Index reading for April was 42, declining from 44 in March and coming in below the level of 45 expected by economists. An index reading below 50 indicates that a majority of builders consider market conditions to be poor. Also on Monday, the Federal Reserve Bank of New York said that its April Empire State Manufacturing Survey showed that "conditions for New York manufacturers improved slightly. "The general business conditions index fell six points but, at 3.1, remained positive for a third consecutive month," the bank said. Economists had expected the general business conditions index for New York manufacturing for April to come in at a reading of 7.