Slowdown in US economy weighs on S&P
U S STOCKS dipped yesterday, dragging the S&P 500 into its first monthly decline since November on signs the US economy may be slowing and as a recession in Spain highlighted risks in the Eurozone.
The Dow Jones industrial average dropped 0.11 per cent to 13,213.63. The S&P 500 Index fell 0.39 per cent to 1,397.91. The Nasdaq Composite Index lost 0.74 per cent, to 3,046.36.
Despite the decline, the picture was not overwhelmingly negative. The S&P closed out April with a fall of 0.8 per cent, after four straight days of gains last week helped the index pare much steeper losses for the month.
Still, a recent string of economic data suggests the economy may slow in the summer months and has caused the market to stall just shy of the four-year highs reached earlier in the month.
A much sharper-than-expected decline in Midwestern business activity in April reported yesterday by an industry group was the latest evidence of a slowdown.
“We had such a strong first quarter, and we’ve lost that momentum in the last two weeks,” said Jake Dollarhide, chief executive at Longbow Asset Management.
He said the data “reinforces the ominous tone on Wall Street, along with the fears we have about Europe”.
Banks were among the top decliners on Wall Street after Standard & Poor’s cut the credit ratings of 11 Spanish banks yesterday, following its downgrade of Spain last week.
The S&P 500 financial sector index fell 0.6 per cent while Bank of America dropped 1.7 per cent to $8.11. Shares of Spanish bank Santander traded in New York fell 2.2 per cent to $6.33 and are down 16 per cent this year.