US stocks plunge on downbeat data

GMT 05:19 2015 Thursday ,26 March

Arab Today, arab today US stocks plunge on downbeat data

US stocks
New York - XINHUA

U.S. stocks fell sharply on Wednesday, with all the three major indices extending their losses into a third straight session, as soft data revealed the weakness of the U.S. manufacturing sector.
The Dow Jones Industrial Average tumbled 292.60 points, or 1.62 percent, to 17,718.54. The S&P 500 dropped 30.54 points, or 1.46 percent, to 2,061.05. The Nasdaq Composite Index slumped 118.21 points, or 2.37 percent, to 4,876.52.
New orders for manufactured durable goods in February unexpectedly decreased 3.2 billion dollars, or 1.4 percent, to 231. 3 billion dollars, well below market expectations of a modest gain, the U.S. Commerce Department said Wednesday.
"While we may see improvement in durable orders over the next several months, robust growth is not in the cards given the global economic situation. Weak foreign demand, tough competition from cheaper imports and lower commodity prices will continue to weigh on domestic manufacturers in the foreseeable future," said Jay Morelock, an economist at FTN Financial, in a note.
Dampening investor sentiment, overseas equities largely declined Wednesday. European shares decreased broadly despite better-than-expected data from Germany. In Asia, Chinese Shanghai Composite Index snapped its 10-day winning streak to end 0.83 percent lower, as China's manufacturing activity in March fell to an 11-month low of 49.2, according to HSBC's preliminary PMI.
In corporate news, H.J. Heinz, owned by P-E firm 3G Capital and Berkshire Hathaway, announced Wednesday that it had entered into a definitive merger agreement with Kraft to create The Kraft Heinz Company, forming the third largest food and beverage company in North America.
Heinz shareholders will own a 51 percent stake in the combined company, while Kraft shareholders will hold a 49 percent stake and receive a special cash dividend of 16.50 dollars per share. Shares of Kraft rocketed 35.62 percent to 83.17 dollars apiece Wednesday.
Investors also weighed the impact of the dollar on the U.S. economy and the coming earnings season. In late New York trading, the dollar index was down 0.26 percent.
The euro increased to 1.0958 dollars from 1.0925 dollars in the previous session, while the dollar bought 119.63 Japanese yen, lower than 119.66 yen of the previous session.
The CBOE Volatility Index, often referred to as Wall Street's fear gauge, soared 13.36 percent to end at 15.44 Wednesday.
In other markets, oil prices increased despite weekly government data showed U.S. crude stockpile continued to increase. Light, sweet crude for May delivery gained 1.7 dollars to settle at 49.21 dollars a barrel on the New York Mercantile Exchange.
Gold futures on the COMEX division of the Nymex rose as the dollar eased amid lower U.S. equities. The most active gold contract for April delivery rose 5.6 dollars, or 0.47 percent, to settle at 1,197.00 dollars per ounce.

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