R.I. stocks fall in market turmoil

STOCKS AT several Rhode Island-based companies are feeling the turmoil shaking up Wall Street. A trader is seen in the S&P 500 pit in this file photo.  / BLOOMBERG FILE PHOTO/TIM BOYLE
STOCKS AT several Rhode Island-based companies are feeling the turmoil shaking up Wall Street. A trader is seen in the S&P 500 pit in this file photo. / BLOOMBERG FILE PHOTO/TIM BOYLE

PROVIDENCE – Stocks at several Rhode Island-based companies are feeling the turmoil shaking up Wall Street.
The Standard & Poor’s 500 Index headed toward the worst week in three years after a selloff due to weak Chinese manufacturing data, Bloomberg News reported, dropping 4.3 percent by 2:31 p.m.
Among local companies, International Game Technology PLC saw the biggest drop since Monday as of 1:30 p.m. Friday, falling 12.2 percent to $17.12 per share from $19.50 at Monday’s opening. Bank of America Corp. and Textron Inc. each lost 6.5 percent, tumbling to $16.45 from $17.61 and $40.66 from $43.52, respectively.
Other local stock performance for the week is as follows:

  • Amgen Inc. decreased 4.8 percent to $159.03 from $167.05.
  • Citizens Financial Group Inc. fell 3.7 percent to $25.33 from $26.31.
  • CVS Health Corp. declined 2.9 percent to $103.89 from $107.07
  • General Dynamics fell 2.7 percent to $146.93 from $151.08
  • Hasbro Inc. slipped 5.2 percent to $75.97 from $80.20.
  • Washington Trust Bancorp Inc. fell 2.6 percent to $38.68 from $39.73

One local company saw its stock price rise: United Natural Foods Inc., by 4 percent, as of early Friday afternoon. UNFI increased to $48.23 from $46.37.

The S&P 500 dropped 1.8 percent at 1:29 p.m. in New York, falling below 2,000 for the first time since February. With yesterday’s plunge, the index’s two-day loss is the most since 2011. The S&P 500 is down more than 5 percent from a record for the first time this year, after sinking below a trading range that has supported it for most of the year.
“For much of this year, the glass was considered half full, and now people the last 48 hours are thinking it’s looking more empty,” George Hashbarger, who oversees $224 million as CEO and portfolio manager at Knoxville, Tenn.-based Quintium Advisors LLC, said by phone.

Investors are selling the biggest winners of 2015. Companies that have come to be known as the Fab Five – Netflix Inc., Facebook Inc., Amazon.com Inc., Google Inc. and Apple Inc. – have seen $97 billion in market value erased over two days. Losses have pushed the Nasdaq 100 Index down 5.1 percent, the biggest two-day decline in almost four years.
More than $3.3 trillion has been erased from the value of global equities after China’s decision to devalue its currency spurred a wave of selling across emerging markets. The move increased speculation that a deepening slowdown in the world’s second-biggest economy will have a ripple effect across the globe.
Today’s data showing a gauge of China manufacturing at the lowest level in more than six years only served to highlight the challenges facing the nation’s economy.
“This week’s selloff started from the yuan’s devaluation, which generated speculation about the true state of China’s economy,” Hertta Alava, who helps oversee the equivalent of $395 million as the head of emerging markets at FIM Asset Management Ltd. in Helsinki, said by email. “China’s PMI was weak, so it is just adding fuel to this negativity.”

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The MSCI All-Country World Index tumbled 1.9 percent to the lowest since October. The MSCI Emerging Markets Index slid 2.2 percent, with the Malaysian ringgit and South Korean won leading currencies lower. Investors have sought safety in the yen, which strengthened for a third day against the dollar.
Hong Kong’s Hang Seng Index dropped 1.3 percent, taking declines since an April high beyond 20 percent. The Shanghai Composite Index slumped 4.3 percent, bringing the week’s loss to more than 10 percent and coming within one point of erasing all gains since the government began efforts to prop up the market in July.
“The whole world’s looking a little bit sad,” said Mark Lister, head of private wealth research at Craigs Investment Partners Ltd. in Wellington, N.Z., which manages about $7.2 billion. “China still looks really worrying on a number of fronts.”

The Stoxx Europe 600 Index lost 3.3 percent, as the selloff engulfed all Western European markets and industries in the benchmark gauge. The index had its worst weekly loss since 2011, down 6.5 percent. It is down 13 percent from an April high, entering a correction.
While concern grew about the global recovery, data today showed the euro-area economy picked up momentum this month, with an improvement in Germany lifting a business index.
Trading patterns show the declines are poised to slow. The 14-day relative strength index on the MSCI All-Country World Index closed below 30 on Thursday, a level that signals an asset is poised to rebound, according to some technical analysts.
Amid the selloff, the S&P 500 is trading at 17.7 times earnings. That’s down from 18.9 times a month ago, which was near a five-year high, though still exceeds the five-year historical average of 16.1 times profit.
Before this week, U.S. equities had held their ground throughout 2015, weathering turmoil from Greece and headwinds including a strong dollar that threatened multinationals’ earnings and a more than 60 percent drop in oil prices.

The S&P 500 had stayed within a range roughly tracking its 50-, 100- and 200-day moving averages, boosted by signs the economy is recovering and support from central banks. The benchmark index hadn’t had a decline of more than 5 percent all year, and still hasn’t dropped more than 10 percent since 2011.
The selloff “simply means that all areas of the market are in gear now, and unfortunately it’s on the downside,” Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion, said in an interview on Bloomberg Television’s “Market Makers” with Cory Johnson and Olivia Sterns. “Investors have to be much more careful now with that technical development.”
U.S. Treasuries are poised for their biggest weekly gain in two months as demand for fixed income soared. Ten-year notes also drew support from signs the Federal Reserve will keep interest rates close to zero for longer, and from a decline in oil prices that helped push a gauge of inflation expectations toward its lowest since 2010.
Bloomberg News contributed to this report.

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