US stocks tumbled on Thursday as recent market gains gave way to brisk selling on signs of manufacturing weakness in the United States and around the globe.
Energy and materials company shares led declines on Wall Street as commodity prices fell.
US crude futures slipped below $80 a barrel for the first time since October and copper tumbled almost 3 per cent.
Data on Thursday showed business activity across the euro zone shrank for a fifth straight month in June and Chinese manufacturing contracted, while weaker overseas demand slowed growth by US factories growth.
Applications for unemployment insurance slipped last week, but the four week moving average for new claims rose to the highest level since early December.
”Markets are worried about the slowdown, not only in US figures but all around the world,” said Jeffrey Saut, chief investment strategist at Raymond James Financial in St.
“The market was extremely overbought coming into this week, and the news gave it an excuse to sell off.”.
Softening data globally lifted hopes of central bank action to support the economy.
The US Federal Reserve announced on Wednesday it would extend one monetary stimulus program and said it was ready to do more to help economic growth if necessary.
The Dow Jones industrial average fell 140.70 points, or 1.10 per cent, to 12,683.69.
Semiconductor stocks weighed on the Nasdaq after chipmaker Micron Technology Inc posted a net loss for the fourth straight quarter.
Micron lost 6.6 per cent to $5.72 and the PHLX semiconductor index dropped 2.7 per cent.
Celgene Corp slumped 11.2 per cent to $59.66 after the company said it was withdrawing a European application for wider use of its big selling Revlimid blood cancer drug.
N) lost 2.3 per cent to $86.51 after forecasting full year earnings below Wall Street estimates, saying a strong dollar has hurt sales abroad.
Copyright @Thomson Reuters 2012 Philip Morris’ news followed other disappointing outlooks from fellow multinationals PepsiCo and Procter & Gambl Onyx Pharmaceuticals Inc surged 44 per cent to $64.08 after US drug advisers backed the company’s drug for cancer patients.
Ligand Pharmaceuticals Inc, which stands to receive royalties from sales of the drug, gained 15.5 per cent to $16.80.
Anna Street is a business journalist based in London, UK. Anna has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Anna spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.
