Dow Today – Stocks Fall After Weak China Growth Data
U.S. stocks edged lower Monday after data showed that China’s economic growth slowed sharply in the third quarter, and investors weighed the risk to global growth from stickier-than-anticipated inflation, supply-chain problems and heightened demand for energy.
The S&P 500 declined less than 0.1% after notching its best week since July last week. The Dow Jones Industrial Average lost about 95 points, or 0.3%. The tech-heavy Nasdaq Composite, in contrast, added 0.1% after falling at the market open.
Data out Monday showed China’s economy grew 4.9% in the third quarter from a year prior, a slowdown from the second quarter’s 7.9% rate. Power shortages and supply-chain problems added to the impact of Beijing’s efforts to rein in its property and technology sectors.
The slower growth data are “a reminder that China is expected to lose some of its momentum, but also how these global issues like the energy crisis and supply chain issues will filter through to global growth,” said
chief investment officer at UK. investment firm Brooks Macdonald. “There’s just a bit of rebasing of expectations for China and the rest of the world.”
Major indexes in Asia closed slightly lower. China’s Shanghai Composite was down 0.1%, while the CSI 300 index of large stocks listed in either Shanghai or Shenzhen closed 1.2% lower. Hong Kong’s Hang Seng rose at the end of trading, to close up 0.3%.
“We’re in a mid-cycle slowdown,” said David Chao, global market strategist for the Asia Pacific ex-Japan region at Invesco, adding that Chinese markets were in for continued uncertainty and volatility in the near term. Still, he added: “Keep in mind the government has many tools to propel the economy forward.”
Shares of Zillow Group declined 9.7% after Bloomberg reported that the company’s automated home-flipping business had stopped pursuing new home acquisitions temporarily.
A strong start to earnings season has underpinned hopes that companies can weather mounting challenges. On Monday, Albertsons added 2.9% after the supermarket company posted higher sales and raised its guidance for the full year.
shares rose 1.9% after the investment-management company posted higher quarterly revenue and earnings on the year, as fee-based and interest income both grew.
In the broader market Monday, the energy sector posted the strongest performance of the S&P 500’s 11 groups.
were among the benchmark index’s biggest winners, gaining 6.8% and 5.5%, respectively.
Brent crude futures, the benchmark in global oil markets, rose 0.5% to $85.32 a barrel. Last week, Brent crude notched its eighth consecutive week of gains—its longest such streak since a 10-week period through April 30, 1999.
Fresh data released Monday by the Federal Reserve showed that U.S. industrial production—a measure of factory, mining and utility output—pulled back in September, falling 1.3% compared with the previous month. Economists surveyed by The Wall Street Journal had expected a 0.2% increase. Monday’s report cited supply-chain snarls and the lingering effects of Hurricane Ida as reasons for the decline.
Bitcoin, the world’s largest cryptocurrency by market value, gained 4% from its 5 p.m. ET level Sunday to trade at $61,837.80. The U.S.’s first bitcoin exchange-traded fund is expected to start trading Tuesday.
In bond markets, the yield on the 10-year Treasury note ticked up to 1.596% Monday, from 1.574% Friday. Yields rise when prices fall.
Overseas, the pan-continental Stoxx Europe 600 fell 0.7%.
The yield on the UK.’s 10-year benchmark gilt rose to 1.134% Monday from 1.093% Friday, after Bank of England Gov. Andrew Bailey said over the weekend that the central bank would “have to act” to curb price pressures, despite the uptick in inflation likely being temporary. The UK.’s shorter-dated government bonds sold off heavily as traders priced in earlier interest rate increases—potentially as soon as November, when the bank’s monetary policy committee meets next.
Other European bond prices also fell, with the yield on the 10-year German bund ticking up to minus 0.148% Monday from minus 0.176% Friday.
—Caitlin McCabe, Frances Yoon and Anna Hirtenstein contributed to this article.Write to Caitlin Ostroff at [email protected] Zoom.com
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