A week of calm turned stormy for the major stock indexes, as American Express (AXP), Boeing (BA), Visa (V), Noble Corp. (NE) and Johnson Controls (JCI) tumbled.
Associated Press The Dow Jones Industrial Average dropped 175.99 points, or 1.1%, to 16,197.35 today while the S&P 500 fell 0.9% to 1,828.46. American Express fell 2.2% to $89.17, Boeing declined 2.1% to $141.31 after it said it was hiring more workers in South Carolina, and Visa dropped 2% to $228.25 after Nieman Marcus said 1.1 million credit cards be at risk from a “malware” attack. Noble Corp. has fell 8.6% to $33.13 after it met earnings forecasts but said that there could be a pause in offshore activity, while Johnson Controls has dropped 4.4% to $49.30 after it offered lower earnings guidance.
Initial jobless claims rose to 326,000 today, but if you’re looking for reason for the selling, how about taking a look at China? The Lindsey Group’s Peter Boockvar explains what happened:
The mood of the market changed at 8:45 est time last night after China's HSBC preliminary January manufacturing PMI fell below 50 to 49.6, a 6 month low from 50.5. The estimate was 50.3 and saw declines in new orders, exports, employment and backlogs. In addition to a drop in the Shanghai index in response, Hong Kong, Japan, Australia, Taiwan, South Korea, Singapore and Malaysia all closed lower. While there is a lot of optimism for global growth in 2014, the picture still looks muddied, especially in emerging markets which is where the real growth alpha has come from.
The upshot: No China, no global synchronized recovery. And if there’s no global recovery, investors have to wonder whether the U.S. can continue to do much of the heavy lifting on its own.
The answer today: No.
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