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Markets

US stocks close sharply lower as global growth fears spur sell-off

NEW YORK: US stocks sold off to close the week down sharply on Friday, with fears of slowing global growth pushing a

Dec 14 2018

NEW YORK: US stocks sold off to close the week down sharply on Friday, with fears of slowing global growth pushing all three major Wall Street indices down about two percent.

Sparked by weaker-than-expected Chinese economic data, the slump left the indices more than 10 percent below their most recent peaks.

The benchmark Dow Jones Industrial Average fell two percent to close the session 24,100.51, its lowest level since May and down 1.2 percent for the week.

The broader S&P 500 fell 1.9 percent to end at 2,599.95, down 1.3 percent for the week, while the tech-heavy Nasdaq sank the furthest, losing 2.3 percent to finish at 6,910.66.

That left the Nasdaq up only a hair's breadth for the year while the Dow and the S&P 500 had already wiped out their gains for 2018.

Chinese authorities on Friday reported weaker-than-expected retail sales and industrial output, renewing long-standing fears that the global economy is slowing, leaving the current bull market little room to continue.

"The fears around slower growth rate globally have been confirmed by the fact that the Chinese data were weak," Nate Thooft of Manulife Asset Management told AFP.

But, he said, "I still think the market is reading way too much in it."

Shares of US drug maker Johnson & Johnson also weighed on the Dow, closing down more than 10 percent following a Reuters report that the company knowingly sold talc-based powder containing the carcinogen asbestos.

Johnson & Johnson forcefully denied the report -- which drew from thousands of pages of documents from the company dating back decades.

Discount retailer Costco sank 8.6 percent on disappointing first-quarter revenue.

Meanwhile, US retail sales slowed to 0.2 percent in November, but excluding gasoline and auto sales, underlying consumer spending was more robust, the Commerce Department reported Friday.

Industrial output also shot up due to higher spending on home heating in a cold snap but showed other signs of weakness in the manufacturing sector, according to a Federal Reserve report.

Copyright AFP (Agence France-Press), 2018