INSUBCONTINENT EXCLUSIVE:
Wall Street's three major indexes tumbled on Friday and the Dow confirmed a correction as weak data from China and Europe stoked fears of
a global economic slowdown, while Johnson Johnson shares were the biggest drag after Reuters reported the company knew for decades that its
Baby Powder contained asbestos.
The SP 600 small cap index confirmed it was in a bear market after closing 20.05 per cent below its Aug
31 peak, falling 1.6 per cent on the day
The Johnson Johnson report, which the company has disputed, sent its shares tumbling 10 per cent in heavy volume, making it the biggest
weight from a single stock on the SP 500 and the Dow Industrials
Investors focused on global growth concerns and worried about US growth after China reported weak monthly retail sales growth and
industrial output numbers, as disappointing economic data was released from the euro zone.
"Weakness showing through in the Chinese economy
in terms of the numbers that were reported as a result of the ongoing trade war was certainly a concern that bleeds into global growth
concerns," said Ryan Larson, head of US equity trading at RBC Global Asset Management in Chicago.
Larson also pointed to concerns about a
Reuters poll of economists which found the risk of a US recession in the next two years rose to 40 per cent and found a significant shift in
expectations toward fewer 2019 Federal Reserve interest rate rises.
The Dow Jones Industrial Average fell 496.87 points, or 2.02 per cent,
to 24,100.51, 10 per cent below its Oct
3 closing high.
The SP 500 lost 50.59 points, or 1.91 per cent, to 2,599.95, 11.3 per cent lower than its Sept
20 record close, marking the poorest performance for the benchmark since it fell more than 14 per cent between May 2015 and January
2016.
And with Friday's close the losses inflicted by the correction are deeper than the declines suffered earlier this year
The Nasdaq Composite dropped 159.67 points, or 2.26 per cent, to 6,910.67.
Johnson Johnson helped pull down the SP healthcare index 3.4
per cent, making it the biggest per centage decliner among the SP's 11 major sectors
The technology index , which includes a number of companies with global operations, especially China, dropped 2.5 per cent.
The energy index
Strong US retail sales data appeared to have little impact on markets, with the SP retail sector falling 2.4 per cent.
"Solid fundamental
data that gets to the core of the US economy is overshadowed by the potential for a global slowdown washing up on our shores," said Phil
Blancato, chief executive of Ladenburg Thalmann Asset Management in New York but he said the sell off was buying opportunity.
The market
struggled all week with choppy trading, on concerns ranging from US-China trade talks, interest rates and a flattening US Treasury yield
curve and the shape of Brexit.
For the week, the SP fell 1.25 per cent and the Dow lost 1.2 per cent while the Nasdaq shed 0.84 per
cent.
Investors appeared to shrug off Beijing's announcement it would suspend additional tariffs on US-made vehicles and auto parts for
three months starting Jan
Amazon.com was the SP's second biggest drag with a 4 per cent drop
Another highflyer, Apple Inc , fell 3.2 per cent, with reports citing a top analyst slashing iPhone sales estimates for the decline.
Costco
Wholesale Corp dropped 8.5 per cent after reporting a fall in quarterly gross margin and was the biggest laggard in consumer
staples.
Declining issues outnumbered advancing ones on the NYSE by a 3.61-to-1 ratio; on Nasdaq, a 3.17-to-1 ratio favoured decliners.
The
SP 500 posted nine new 52-week highs and 85 new lows; the Nasdaq Composite recorded six new highs and 425 new lows
On US exchanges 7.89 billion shares changed hands compared with the 7.97 billion-share average for the last 20 sessions.
