U.S. stocks dropped across the board today in part due to news that China’s economy is showing new signs of weakness. Today’s losses marked an end to the Dow’s 7 day winning streak as both transport and biotech stocks took a bath. But the focus was on China as that country’s imports fell in September by a surprisingly big margin of 20.4% from a year ago. China’s foreign trade figures showed purchases of overseas products declined from the 5.5% decline in August. The drop shows weak demand for Chinese goods despite increased stimulus efforts aimed at reversing a slide in economic growth in China. Sales of Chinese goods to foreign markets fell 3.7%. China recently revised down its growth rate from 7.4% to 7.3%, the weakest pace for almost a quarter century.
Nick Raich, CEO of The Earnings Scout, told CNBC:
“Earnings aren’t the problem. It’s the sales and some additional pressure on stocks from the weaker-than-expected Chinese trade data. China data are really telling the story too that demand for foreign goods in China is down.”
Transport stocks were the biggest losers in the Dow, while health care & manufacturing suffered the greatest losses in the S&P.
Here are the final numbers from Tuesday, 10/13/15 on Wall Street:
Dow Jones Industrial Average: 17,081.89 (-49.97/ -0.29%)
NASDAQ: 4,796.61 (-42.03/ -0.87%)
S&P 500: 2,003.69 (-13.77 / -0.68%)
