After Market: Investors Fear Big Trouble from Brittle China

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Thursday's big time selloff on Wall Street had its roots 10,000 miles away. Investors were rattled by a report out of China this morning showing the manufacturing sector in the world's most populous nation is contracting. So, just as the pace of economic growth in the U.S. is picking up, there's concern that the worldwide economy could be headed for a slump.

The Dow Jones industrial average (^DJI) tumbled 176 points, the Standard & Poor's 500 index (^GPSC) slid 16, and the Nasdaq composite (^IXIC) lost 24 points. It was a broad-based decline, with losers outnumbering gainers by a wide margin.

The financial components of the Dow led the way, with American Express (AXP), Goldman Sachs (GS), JPMorgan (JPM) and Visa (V) all losing about 2 percent.

Chinese stocks that also trade in the U.S. were hit hard -- Baidu (BIDU) and Sina (SINA), for example, fell about 6 percent, and Qihoo 360 Technology (QIHU) lost 3 percent.

The troubling report from China was the biggest problem, but corporate earnings also provided a drag on prices.

In the airline sector, United-Continental (UAL) and Southwest (LUV) both fell 1.5 percent and 2.5 percent respectively, despite posting strong earnings. Defense contractor Lockheed-Martin (LMT) lost 4 percent after reporting that its net fell. And the phone maker Nokia (NOK) slid almost 9 percent after posting a bigger than expected loss.

There were a few stocks that bucked the downtrend. McDonald's (MCD) edged 0.5 percent higher as its net edged above expectations. AT&T (T) , which said it expects a $7.6 billion accounting gain, added almost 1.5 percent.

Union Pacific (UNP) gained more than 3 percent, and rival railroad Norfolk Southern (NSC) rose 0.8 percent on a JPMorgan upgrade.

And the big winner was Netflix (NFLX). Its net soared and the number of subscribers jumped well above expectations. The stock rallied more than 16 percent on the day, and it has nearly quadrupled in value over the past year.

Elsewhere, Herbalife (HLF) tumbled more than 10 percent after Massachusetts Sen. Ed Markey called for a Congressional investigation of its business practices. The company has been targeted over the past year by some short-sellers who claim the nutrition company is operated like a pyramid scheme.

And American Eagle (AEO) fell almost 8 percent after its CEO unexpectedly resigned. The retailer has struggled with disappointing sales.

What to Watch Friday:

Theses companies are due to report quarterly financial results before U.S. markets open:
  • Bristol-Myers (BMY)
  • Honeywell (HON)
  • Kimberly-Clark (KMB)
  • Procter & Gamble (PG)
  • Xerox (XRX)
-Produced by Drew Trachtenberg.


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33 Comments

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RouteUS66Busload

China will own and rule America.

January 25 2014 at 4:37 AM Report abuse rate up rate down Reply
k4jlp

Not to worry folks, Regan and the Rebubs "trickle down economy" should kick in about 75 years from now....

January 24 2014 at 6:58 AM Report abuse +1 rate up rate down Reply
ectullis

In any event Obsama et al must go

January 24 2014 at 12:58 AM Report abuse +2 rate up rate down Reply
NJPACKFAN

China Syndrome........When China crashes the rest of the world crashes.

January 23 2014 at 11:31 PM Report abuse +2 rate up rate down Reply
jimmy_branch

Wall Street always has to blame their failed Greed plays on someone else.

This market is the Fed Clown and Obummer Ballon of the Century.

January 23 2014 at 9:47 PM Report abuse rate up rate down Reply
Mickey, Minnie

Total BS......Nobody knows where this market is headed! Not any portfolio manager, not any "financial guru" not any quote "Market analyst." This is why having a lot of money in an institution like this is foolhardy at best!

January 23 2014 at 8:59 PM Report abuse +5 rate up rate down Reply
FRANKS-DESIGN

China Contracting..? If you mean 'Shrinking", is not that a good sign? Opens up more Global competition...Monopolies can ruin any economy...

January 23 2014 at 8:49 PM Report abuse +2 rate up rate down Reply
Iselin007

Next time you need a good laugh just download the latest NJ employment report.

January 23 2014 at 8:45 PM Report abuse +2 rate up rate down Reply
1 reply to Iselin007's comment
firstmy

We were all laughed out of Atlantic City employment related to The bridge artist ! C.C. ! Thank you dear Chris for destroying our Casino jobs in Atlantic city...Good luck to you when they open in Newark

January 23 2014 at 10:23 PM Report abuse -2 rate up rate down Reply
dcsincc

who the fuc puts money into a country that cant even run their own house....

January 23 2014 at 8:31 PM Report abuse +3 rate up rate down Reply
Iselin007

Sure wish that golbal warming get here soon because it is so cold here; there posting the temperature where the rating should be.

January 23 2014 at 8:28 PM Report abuse +2 rate up rate down Reply
2 replies to Iselin007's comment
Iselin007

The inactivity in the job market is cooling off temperatures even further.

January 23 2014 at 8:30 PM Report abuse +1 rate up rate down Reply
peach2man

Its here the polar ice caps are melting raising the sea levels bringing wild temp shifts you are seeing it firsthand.

January 23 2014 at 10:27 PM Report abuse -1 rate up rate down Reply