A sell-off in drug manufacturers extended into a second week.
European markers were also sharply lower Monday, with France’s CAC-40 losing 2.8 per cent, while Germany’s DAX fell 2.1 per cent and Britain’s FTSE 100 was down 2.5 per cent. Among the S&P sectors, the health care index was the deepest decliner, down 3.84 percent. “It’s time for risk-off and there’s no place to hide”, said Richard Weeks, managing director at HighTower Advisors in Vienna, Virginia.
Frederick also said the Federal Reserve’s September 17 decision to leave interest rates on hold might have raised doubts about the health of the USA economy.
According to the country’s National Bureau of Statistics, industrial profits in August declined 8.8% year-on-year compared with a 2.9% drop in the previous month, registering their biggest drop since records began in October 2011.
The drop Monday put the market on track for its biggest fall since September 1.
Mr. Katz says he has roughly halved exposure to emerging-market stocks and fixed-income investments since mid-August and is planning to focus on USA stocks with little exposure to worldwide markets. Federal Reserve officials are scheduled to speak, including Chair Janet Yellen on Wednesday.
The stocks shed after the release of weak economic data from China made investors jittery.
The Dow Jones average of 30 stocks was down 185.84 points at 16,128.83, the broader S&P 500 index declined 26.58 points to 1,904.76 and the Nasdaq index lost 78.21 points to 4,608.29.
Caroline Bain, senior commodities economist at Capital Economics, said: “The market is looking for direction and probably the most likely source of that is Chinese data”.
“I think it’s a lot of panic”.
The CBOE Volatility index, known as Wall Street’s “fear gauge”, jumped 16 percent to 27.37, well above its long-term average of 20.
Alcoa rose 52 cents, or 5.7%, to 9.59, after the aluminum maker said it would split into two publicly traded companies, one focusing on mining and refining and the other on more finished industrial products. The S&P 500 closed down 1.4 percent for the week, the Dow was 0.4 percent lower. In a note, Investec Securities said mining companies “gorged themselves on cheap debt” in a race to grow production following the Chinese stimulus in the wake of the global financial crisis and that Glencore could see all its equity value “evaporate” if major commodity prices stay at current levels. Nexstar dipped 2.3 percent.
Declining issues outnumbered advancing ones on the NYSE by 2,623 to 384. On the Nasdaq, 2,309 issues fell and 502 advanced.
The Canadian dollar was down one-third of a cent and USA index futures were negative before stock markets opened Monday.