Poor US factory data hits stocks

Julian Harris
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DISAPPOINTING economic data weighed on US stocks yesterday, as worrying surveys continue to dent confidence in the recovery of the world’s biggest economy.

An estimate of American factory activity for July revealed the slowest growth in 19 months, while a regional manufacturing survey showed its worst top line since April 2009.

The Richmond Federal Reserve’s index for manufacturing plunged from minus one per cent to minus 17 per cent, as shipments cascaded to minus 23 per cent (from zero), and new orders tumbled to minus 25 per cent (from minus seven per cent).

Negative scores show that a larger proportion of factories in the area reported worse levels compared to the proportion reporting improved levels.

The Richmond Fed also released data on service sector revenues, the index of which dived to minus 11 per cent from a positive reading of 14 per cent last month.

Meanwhile, a “flash” purchasing managers’ index survey by Markit, of manufacturing across the US, fell to 51.8 from 52.5 in June. Scores above 50 indicate growth.

The Dow Jones closed down over 100 points, partly on Eurozone worries.