Black Monday: Stocks Hammed on Emerging Markets Worries, Lousy Econ. Data

In this Tuesday, Oct. 23, 2012, file photo, abroker works at the Buenos Aires Stock Exchange in Buenos Aires, Argentina. From Turkey to South Africa to Argentina, emerging markets are being slammed by rising inflation, economic mismanagement and political turmoil (AP)

(TheBlaze/AP) — U.S. stocks took a huge hit Monday as worries over emerging market trends and a slew of bleak economic data weighed heavily on investors.

The Dow Jones industrial average tumbled more than 320 points after reports of sluggish U.S growth added to investor worries about the global economy.

It was the biggest one-day decline for the blue-chip index in more than seven months. And the drop followed the Dow’s worst January performance since 2009.

U.S. stocks opened lower after declines in European and Japanese indexes. Then it quickly turned into a slide as a spate of discouraging economic data on everything from manufacturing to auto sales to construction spending poured in.

By late afternoon, the sell-off accelerated further, bringing the Dow down more than 7 percent for the year. The S&P 500 index was down more than 5 percent for 2013.

All told, the Dow dropped 326.05 points, or 2.1 percent, to close at 15,372.80, its biggest decline since June 20, 2013.

Black Monday: Stocks Hammed on Emerging Markets Worries, Lousy Econ. Data

The Standard & Poor’s 500 index lost 40.70 points, or 2.3 percent, to 1,741.89.

Black Monday: Stocks Hammed on Emerging Markets Worries, Lousy Econ. Data

The Nasdaq composite dropped 106.92 points, or 2.6 percent, to 3,996.96.

Black Monday: Stocks Hammed on Emerging Markets Worries, Lousy Econ. DataThere were signs of worry throughout the market. The VIX index, a measure of stock market volatility, rose to its highest level since December 2012. Investors shifted into U.S. government bonds, pushing yields lower and extending their sharp decline since the start of the year.

Investors were discouraged Monday by a private survey showing U.S. manufacturing barely expanded last month. Construction spending rose modestly in December, slowing from healthy gains a month earlier.

Automakers also piled on the disappointing news.

Ford shares slipped 41 cents, or 2.7 percent, to $14.55 and General Motors shares fell 83 cents, or 2.3 percent, to $35.25 after the automakers reported a drop in U.S. January sales, hurt by harsh weather that kept customers away from dealerships.

GM sales fell 12 percent, while Ford said sales fell 7 percent. Chrysler bucked the trend with U.S. sales gains of 8 percent, and analysts still expect U.S. auto sales to reach more than 16 million this year – a return to pre-recession levels.

Fresh signs of weakness in China also weighed on the minds of investors.

An official Chinese manufacturing survey released over the weekend showed factory output grew at a slower rate in January compared with December. The report released on the weekend followed an HSBC survey that showed an outright contraction in manufacturing.

Any signs of slowdown in China’s economy – the world’s second-largest – can spell bad news because it drives exports and is a key trading partner for developing countries such as South Africa and Indonesia that supply Chinese factories with raw materials.

Among other negative signs for the market: In 2013, the Dow had only one 300-point-plus down day. It has had two 300-plus drops in 2014, barely two months in.

All 10 sectors in the S&P 500 index fell, and telecommunications stocks posted the biggest declines, weighed down by AT&T and Verizon Communications.

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