US stocks sink as IMF trims forecast, Dow -1.6%

GMT 22:02 2014 Tuesday ,07 October

Arab Today, arab today US stocks sink as IMF trims forecast, Dow -1.6%

A street sign for Wall Street near the New York Stock Exchange (NYSE)
New York - AFP

US stocks finished sharply lower Tuesday after the International Monetary Fund trimmed its global growth forecast while Germany posted a second straight day of disappointing economic data.
The Dow Jones Industrial Average tumbled 272.52 points (1.60 percent) to 16,719.39.
The broad-based S&P 500 fell 29.72 (1.51 percent) to 1,935.10, while the tech-rich Nasdaq Composite Index sank 69.60 (1.56 percent) to 4,385.20.
The IMF cut its 2014 global growth forecast to 3.3 percent, down 0.1 percentage point from its July estimate and warned of stagnation in advanced economies.
The German economy ministry reported that industrial output in Europe's largest economy sank by 4.0 percent in August. The report came a day after statistics office Destatis said that German factory orders had slumped 5.7 percent in August.
Other investor worries include signs of progress in the jihadist campaign in Syria, Federal Reserve plans to wind down stimulus, and Wednesday's unofficial start of the third-quarter earnings season in the wake of weakness in Europe.
"Some people are concerned about geopolitics," said Brent Schutte, market strategist at BMO Global Asset Management. "Some people are concerned about the Fed. Some people are concerned about Europe."
"And all those things are coming to the fore right now."
Amazon fell 1.6 percent as European Union officials said they were investigating whether the online retailer unfairly benefited from sweetheart tax deals in Luxembourg.
General Motors skidded 5.9 percent following a Morgan Stanley report titled "we're not waiting for GM to warn" that said the automaker's growth forecast was unrealistic.
Morgan Stanley said GM earnings would suffer from pressures in Russia and Latin America, as well as unfavorable foreign exchange effects.
Agco, which manufactures agricultural equipment, plummeted 10.6 percent after slashing its earnings forecast due to disappointing sales. Deere, another maker of farm equipment, lost 3.4 percent.
SodaStream, which manufacturers home appliances for making soda, sank 21.9 percent as it projected third-quarter revenues of just $125 million, well below the $154.1 million expected by analysts.
Bond prices rose sharply. The yield on the 10-year US Treasury slumped to 2.35 percent from 2.42 percent Monday, while the 30-year declined to 3.06 percent from 3.13 percent. Bond prices and yields move inversely.

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