Wall Street drops on global growth fears; J&J tumbles on Reuters report
By Medha Singh (Reuters) - U.S. stocks fell on Friday as weak economic data from China and Europe rekindled fears of slowing global growth, with Johnson & Johnson leading the losses after Reuters reported the company knew for decades that asbestos lurked in its Baby Powder
By Medha Singh
(Reuters) - U.S. stocks fell on Friday as weak economic data from China and Europe rekindled fears of slowing global growth, with Johnson & Johnson leading the losses after Reuters reported the company knew for decades that asbestos lurked in its Baby Powder.
The company's shares tumbled 11.46 percent, on pace for their biggest one-day percentage drop in 16 years. The stock was the biggest drag on the S&P 500 and the Dow Industrials.
The pharma major also pulled down the S&P healthcare index 3.32 percent, making it the biggest decliner among the 11 major sectors.
The technology index, which includes a number of companies with global operations, especially China, dropped 1.31 percent. Apple Inc fell 2.23 percent, with some reports citing a top analyst slashing iPhone sales estimate for the decline.
Sentiment was weak from the start after China reported weak monthly retail sales growth and industrial output numbers, with disappointing economic data from Euro zone, France and Germany souring the mood further.
Investors also shrugged off strong U.S. retail sales data and Beijing's announcement that it would suspend additional tariffs on U.S.-made vehicles and auto parts for three months from Jan. 1.
"Focus has shifted from just the U.S.-China trade war to what's going on in the global economy and what that means for earnings for the U.S. corporations in the 2019," said Art Hogan, chief market strategist at B. Riley FBR in New York.
Trading has been volatile this week and the market has failed to hold on to its opening levels in magnitude or direction for the full session on concerns ranging from trade talks to interest rates and from a flattening U.S. Treasury yield curve to uncertainty about Brexit.
A Reuters poll showed that the risk of a U.S. recession in the next two years has risen to 40 percent, while expectations of interest rate hikes by the Federal Reserve has slumped for 2019. A Fed policy meeting is scheduled for next week.
Ten of the 11 S&P sectors were lower, with consumer staples and energy down more than 1 percent, while the communications services index was flat.
At 11:30 a.m. ET, the Dow Jones Industrial Average was down 387.60 points, or 1.58 percent, at 24,209.78. The S&P 500 was down 32.58 points, or 1.23 percent, at 2,617.96 and the Nasdaq Composite was down 72.76 points, or 1.03 percent, at 6,997.58.
Costco Wholesale Corp dropped 8.10 percent after the warehouse club retailer reported a fall in quarterly gross margin. The stock was the biggest laggard on the consumer staples index.
Walgreens Boots Alliance Inc was another healthcare stock that declined, down 4.17 percent, after Goldman Sachs downgraded the drugstore owner's shares.
Cisco Systems Inc slipped 2.53 percent after brokerage Instinet moved to sidelines on the company's stock, citing weak IT spending in 2019.
Declining issues outnumbered advancers for a 1.94-to-1 ratio on the NYSE and for a 1.53-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and 68 new lows, while the Nasdaq recorded five new highs and 294 new lows.
(Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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