As reported by Wall Street Journal’s Jonathan Cheng and Steven Russolillo, U.S. stocks fell as weak economic data and a negative outlook from Hewlett-Packard heightened fears about a slowdown in the global economic recovery.
The Dow Jones Industrial Average was recently down 75.87 points, or 0.6%, to 12472.50 in afternoon trading after being down 151 points, or 1.2%. H-P plunged 8.3% to lead the Dow lower. Caterpillar sank 3.9% and Alcoa dropped 3.5%, while 3M dropped 2.2%.
The Standard & Poor’s 500-stock index shed nine points, or 0.7%, to 1321; the Nasdaq Composite declined 17 points, or 0.7%, to 2765.
Spooking investors was the first drop in U.S. manufacturing production in 10 months in April as natural disasters in Japan disrupted the auto industry. The drop in manufacturing weighed on overall U.S. industrial production, which was unchanged last month despite gains in mining and utilities output, according to the Federal Reserve.
Additionally, U.S. home construction fell unexpectedly in April, an indication that the troubled sector will remain a drag on the economic recovery.
“We’re in the midst of this corrective phase. It’s only been a couple of weeks and not that dramatic in terms of percentages, but people seem to be taking some risk off the table,” said Brian Lazorishak, portfolio manager and quantitative analyst at Chase Investment Counsel.
Adding to the pessimism was a selloff in commodities. Crude-oil futures fell 1.6%, trading below $96 a barrel, while gold slid below $1480 an ounce. That hurt the shares of materials and energy companies, including Alcoa and Chevron, which fell 1.1%.