US stocks opened lower on Monday, starting February on a dour note as weak economic data out of China exacerbated concerns about a global slowdown and oil prices resumed their downward spiral.
The data from China showed that the world’s second-largest economy’s manufacturing sector contracted in January at the fastest pace since 2012.
Oil prices fell after the China data added to worries about demand and an Opec source played down talk of an emergency meeting to stem the decline. Oil prices have fallen more than 70 per cent since mid-2014.
Slammed by collapsing oil prices that have fed doubts about the health of the global economy, stocks have had a volatile start to the year with traders expecting the Fed to scale back the number of rate hikes this year. Coming off the worst January since 2009, the S&P 500 is already down 5 per cent for the year.
“Further weakness in China offers little evidence that their efforts to stabilise economic growth have been sufficiently effective and that would make a worry for commodity prices,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
In morning trading the Dow Jones industrial average was down 127.31 points, or 0.77 per cent, at 16,338.99, the S&P 500 was down 14.58 points, or 0.75 per cent, at 1,925.66 and the Nasdaq Composite index was down 33.58 points, or 0.73 per cent, at 4,580.38.
Nine of the 10 major S&P sectors were lower, with the energy index's 2.2 percent fall leading the decliners. Oil majors Exxon and Chevron were down about 2 per cent.
Surge
Wall Street surged over 2 per cent on Friday after the Bank of Japan unexpectedly cut interest rates and technology shares rallied.
A slew of US economic reports is scheduled to be released on Monday, including manufacturing and construction spending numbers.
Data on Monday showed US consumer spending was unchanged in December as households cut back on purchases of automobiles and unseasonably mild weather weighed on demand for utilities, but a jump in savings to a three-year high suggested there is enough muscle to boost consumption in the months ahead.
Internet giant Alphabet, which reports after the close, was up 0.8 per cent at $768. Toy maker Mattel will also release its quarterly reports after the close.
Twitter was up 5.2 per cent at $17.68 after rumors of a private equity deal.
- Reuters
