Stocks drop as manufacturing gauge falls more than forecast
By Lu Wang Bloomberg News
NEW YORK – U.S. stocks fell, ending the Standard & Poor’s 500 Index’s longest stretch without a 5 percent slide since 2006, as a gauge of manufacturing in the world’s largest economy declined more than estimated.
Telephone stocks plunged after AT&T Inc. introduced new service plans, the latest in an escalating price war among wireless carriers. Ford Motor Co. and General Motors Co. fell at least 2.2 percent after reporting declines in January auto sales that were greater than analysts had estimated. Jos. A. Bank Clothiers Inc. slid 3.7 percent after management told Men’s Wearhouse Inc. it will not enter takeover talks. Pfizer Inc. rose 2 percent after saying a treatment for women with advanced breast cancer showed “positive” results in a trial.
The S&P 500 fell 1.8 percent to 1,751.45 at 1:16 p.m. in New York, poised for the lowest close since Nov. 8. The Dow Jones Industrial Average lost 234.02 points, or 1.5 percent, to 15,464.83. The gauge has fallen 6.7 percent this year to the lowest since October. Trading in S&P 500 stocks was 48 percent above the 30-day averaging during this time of the day.
“Everyone walked in this year expecting a continuation of at least growing economic activity and the latest data we’ve been seeing throw a bit of cold water on that theory,” Bill Schultz, chief investment officer who oversees about $1.1 billion at McQueen Ball & Associates in Bethlehem, Penn., said by phone. “Economic activity was not as strong as people expected. People are taking a pause, reassessing where they stand.”
The S&P 500 has dropped 5.2 percent this year as the Federal Reserve trimmed its bond-buying program for the second time in as many months and emerging-market currencies tumbled amid signs growth was slowing in China. The country’s official Purchasing Managers’ Index decreased to a six-month low in January as output and orders slowed.
The benchmark measure for U.S. equities retreated 3.6 percent in January, its worst opening month since 2010, as the gauge retreated in each of the month’s final three weeks, the longest streak since 2012.