NEW YORK - U.S. stocks fell, following a two- week decline in the Standard & Poor’s 500 Index, as data showed American manufacturing contracted in August, fueling concern the economic recovery is slowing.
Netflix Inc. slumped 8 percent, the most in the S&P 500, after Amazon.com Inc. reached a deal with pay-television channel Epix. Peabody Energy Corp. lost 4 percent as Dahlman Rose & Co. cut its recommendation on the company’s stock. Morgan Stanley rose 1.8 percent after CLSA Ltd. recommended buying the shares. Valeant Pharmaceuticals International Inc. rallied 14 percent after agreeing to buy Medicis Pharmaceutical Corp. for $2.6 billion. Medicis surged 38 percent.
The S&P 500 declined 0.6 percent to 1,398.43 at 11:08 a.m. New York time. The Dow Jones Industrial Average retreated 98.65 points, or 0.8 percent, to 12,992.19. The U.S. market was closed yesterday for a holiday. Trading in S&P 500 companies was down 4.7 percent from the 30-day average at this time of day.
“Economic data continues to be soft all over the world and that’s just the basic reality,” John Kattar, chief investment officer at Eastern Bank Wealth Management in Boston, which manages $1.7 billion, said in a telephone interview “But more important than that is speculation on what the ECB is going to do this week and what the Fed is going to do next week,” he said, referring to policy meetings by the European Central Bank and the Federal Reserve.
Equities fell as the Institute for Supply Management’s U.S. factory index dropped to 49.6 in August from 49.8 a month earlier. Economists in a Bloomberg survey projected an August reading of 50, which is the dividing line between expansion and contraction. A report over the weekend showed China’s manufacturing contracted at the fastest pace since March 2009.
European leaders are meeting in Rome and Berlin today, two days before the European Central Bank holds its policy meeting. ECB President Mario Draghi is due to distribute his bond- purchasing plan to national banks after he was said to tell officials he would be comfortable buying three-year government bonds to lower borrowing costs.
The S&P 500 rose 2 percent in August, capping its longest monthly rally since March, amid expectations global central banks would stimulate the economy. Federal Reserve Chairman Ben S. Bernanke said on Aug. 31 at an annual forum in Jackson Hole, Wyoming, that he wouldn’t rule out steps to lower a jobless rate he described as a “grave concern.” Payrolls probably grew at a slower pace in August and unemployment exceeded 8 percent for a 43rd month, economists said before a report this week.
PBN is now accepting applications for its newest award program and event for RI & Bristol County to celebrate the Manufacturing Renaissance that is evolving regionally and across the country. The deadline for applications is March 20th.
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