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US stocks fall as declines in oil prices raise concerns about global growth

As investors shunned growth stocks, the S&P technology index fell 1.6 per cent, led by losses in Apple Inc and chipmaker Skyworks Solutions Inc, which fell 8.8 per cent after weak forecast.


Devdiscourse News Desk Last Updated at 09-11-2018 21:04:53 IST
US stocks fall as declines in oil prices raise concerns about global growth
  • Nine of the 11 major S&P sectors were lower, with slight gains seen in the defensive real estate and consumer staples indexes. General Electric fell 4.8 per cent after J.P. Morgan cut price target on the stock to $6 from $10. (Image Credit: Twitter)

U.S. stocks fell on Friday, with shares of technology, energy and industrial companies bearing the brunt of a selloff, as weak Chinese data and declines in oil prices raised concerns about global growth.

As investors shunned growth stocks, the S&P technology index fell 1.6 per cent, led by losses in Apple Inc and chipmaker Skyworks Solutions Inc, which fell 8.8 per cent after weak forecast.

The S&P energy index shed 1.8 per cent as U.S. crude price entered "bear market" territory, falling more than 20 per cent since early October and below $60 a barrel.

Oil majors Exxon Mobil Corp and Chevron Corp fell more than 1 per cent, while a drop in the price of copper, considered an economic bellwether, led to a 4.4 per cent loss in miner Freeport McMoran Inc.

"A lot of investors look at oil prices as the general indicator of the global economy, so it being weak is not a good sign," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

Amid a bitter trade dispute between the Washington and Beijing, Chinese data showed producer inflation fell for the fourth straight month in October on cooling domestic demand and manufacturing activity.

The China report sent global stocks into a tailspin, with trade-sensitive stocks such as Boeing Co and Caterpillar Inc sliding 1 per cent and 3.3 per cent, respectively.

"Worries about trade war and how the slowdown in China will impact the rest of the world mean stocks appear to be riskier, so there's a typical risk-off move in markets today," said DZ Bank rates strategist Pascal Segesser.

While the Fed policymakers, as expected, left interest rates unchanged on Thursday following a two-day meeting, their policy statement signalled more rate hikes ahead, with the fourth hike this year expected in December.

Data on Friday showed U.S. producer prices rose more than expected in October and at their fastest pace in six years, fueled by a jump in costs for energy and trade services.

Prices paid by producers rose 0.6 per cent, while analysts polled by Reuters had expected producer prices to rise 0.2 per cent from September.

At 9:57 a.m. EDT the Dow Jones Industrial Average was down 151.20 points, or 0.58 per cent, at 26,040.02, the S&P 500 was down 20.80 points, or 0.74 per cent, at 2,786.03 and the Nasdaq Composite was down 82.86 points, or 1.10 per cent, at 7,448.02.

Nine of the 11 major S&P sectors were lower, with slight gains seen in the defensive real estate and consumer staples indexes. General Electric fell 4.8 per cent after J.P. Morgan cut price target on the stock to $6 from $10.

Activision Blizzard Inc dived 13.8 per cent after the video game publisher forecast fourth-quarter earnings below analysts' estimates.

Walt Disney Co, a member of the Dow Jones Industrial Average, rose about 3 per cent after the media company reported better-than-expected results as its theme parks and Marvel movie "Ant-Man and the Wasp" attracted crowd.

Declining issues outnumbered advancers for a 2.51-to-1 ratio on the NYSE and for a 2.50-to-1 ratio on the Nasdaq.

(With inputs from agencies.)


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