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Tough start to 2019 for stocks after weak data from China

Last Updated Jan 2, 2019 at 7:43 am PDT

(iStock Photo)

NEW YORK — Global stocks are falling to start 2019 after more shaky economic news from China. The stock market turned volatile late in 2018 as investors grew increasingly worried about threats to global economic growth, and those concerns could define the market’s path new year as well.

A government survey and one by a major business magazine showed Chinese manufacturing weakened in December as global and domestic demand both cooled. That weighed on big exporters Wednesday, with technology companies like Microsoft and Netflix and industrials like Boeing and Caterpillar taking sharp losses. The Dow Jones Industrial Average fell 300 points.

The major U.S. indexes and the global market are coming off their worst year in a decade. The benchmark S&P 500 fell 6 per cent last year, its first substantial loss since 2008, and it’s fallen more than 15 per cent since late September. Many other stock indexes around the world fared even worse last year as traders saw signs the global economy was growing at a slower clip after a few years of strength.

From September through the end of December, investors became more and more worried that challenges including U.S.-China trade tensions, rising interest rates, and political uncertainty could slow the economy and company profits more dramatically, and possibly tip the U.S. economy and the global economy into a recession. The U.S. economy has been expanding for almost a decade, and stocks have risen steadily over that time.

The S&P 500 index fell 30 points, or 1.2 per cent, to 2,476 as of 9:45 a.m. Eastern time. The Dow fell 311 points, or 1.3 per cent, to 23,023. The Nasdaq composite dropped 96 points, or 1.5 per cent, to 6,538.

The Russell 2000 index, which tracks smaller companies, shed 20 points, or 1.5 per cent, to 1,327. Most markets were closed on Tuesday for the New Years’ Day holiday.

France’s CAC 40 fell 1.4 per cent and Germany’s DAX retreated 0.6 per cent. London’s FTSE 100 was down 0.7 per cent. Hong Kong’s Hang Seng tumbled 2.8 per cent and Seoul’s Kospi gave up 1.5 per cent. Tokyo’s markets were closed.

Prices on long-term government bonds rose, a sign investors had concerns about economic growth and were looking for safer options. The yield on the 10-year Treasury note fell to 2.65 per cent from 2.69 per cent. The yield on the 2-year Treasury note fell to 2.48 per cent from 2.49 per cent.

Among technology companies, Microsoft gave up 1.9 per cent to $99.60 and Apple fell 1.8 per cent to $154.88. Industrials were also weak, with Boeing down 2.2 per cent to $315.26 and Caterpillar falling 2.3 per cent to $124.16. Among internet stocks, Netflix shed 3.6 per cent to $258 and Alphabet, the parent company of Google, lost 1.2 per cent to $1,032.

Benchmark U.S. crude lost 1.8 per cent to $44.59 per barrel in New York. Brent crude, used to price international oils, slumped 1.4 per cent to $53.05 per barrel in London. Oil prices fell sharply over the last three months of 2018 as investors reacted to the possibility of weaker demand for energy as economic growth slowed.

All 11 of the stock groups that make up the S&P 500 were lower Wednesday morning. All but two of them finished last year with losses, as health care and utility companies made small gains.

Electric car maker Tesla sank after its fourth-quarter vehicle deliveries fell short of Wall Street projections. The company also says it’s cutting the prices of its three different cars by $2,000 each to help customers handle the gradual phase-out of federal electric vehicle tax credits. The stock gave up 9.4 per cent to $301.65.

The dollar fell to 109.31 yen from 109.61 yen. The euro fell to $1.1369 from $1.1445. The British pound slid to $1.2602 from $1.2752.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP

Marley Jay, The Associated Press