Thursday’s big time selloff on Wall Street had its roots 10,000 miles away. Investors were rattled by a report out of China this morning showing the manufacturing sector in the world’s most populous nation is contracting. So, just as the pace of economic growth in the U.S. is picking up, there’s concern that the worldwide economy could be headed for a slump.
The Dow Jones industrial average (^DJI) tumbled 176 points, the Standard Poor’s 500 index (^GPSC) slid 16, and the Nasdaq composite (^IXIC) lost 24 points. It was a broad-based decline, with losers outnumbering gainers by a wide margin.
The troubling report from China was the biggest problem, but corporate earnings also provided a drag on prices.
In the airline sector, United-Continental (UAL) and Southwest (LUV) both fell 1.5 percent and 2.5 percent respectively, despite posting strong earnings. Defense contractor Lockheed-Martin (LMT) lost 4 percent after reporting that its net fell. And the phone maker Nokia (NOK) slid almost 9 percent after posting a bigger than expected loss.
There were a few stocks that bucked the downtrend. McDonald’s (MCD) edged 0.5 percent higher as its net edged above expectations. ATT (T) , which said it expects a $7.6 billion accounting gain, added almost 1.5 percent.
And the big winner was Netflix (NFLX). Its net soared and the number of subscribers jumped well above expectations. The stock rallied more than 16 percent on the day, and it has nearly quadrupled in value over the past year.
Elsewhere, Herbalife (HLF) tumbled more than 10 percent after Massachusetts Sen. Ed Markey called for a Congressional investigation of its business practices. The company has been targeted over the past year by some short-sellers who claim the nutrition company is operated like a pyramid scheme.
And American Eagle (AEO) fell almost 8 percent after its CEO unexpectedly resigned. The retailer has struggled with disappointing sales.
What to Watch Friday:
Theses companies are due to report quarterly financial results before U.S. markets open:
–Produced by Drew Trachtenberg.