Wall Street pulled back on the first trading day of the new year, as more disappointing economic data from China hampered global risk appetite.
The Dow Jones Industrial Average dropped 154 points to start off the session, led by a decline in Caterpillar. These losses come after the 30-stock index completed its worst year in a decade on Monday. The S&P 500 pulled back 0.6 percent as real estate and health care lagged. The Nasdaq Composite fell 0.7 percent as shares of Amazon, Apple, Netflix and Google-parent Alphabet all declined.
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The moves come after a private sector survey showed manufacturing activity in the world’s second-largest economy contracted for the first time in 19 months. China’s Markit Manufacturing Purchasing Managers’ Index for December dipped to 49.7 from 50.2 in November.
The weaker-than-expected data follows a poor official survey on factory output, compounding concerns about a possible economic slowdown this year.
“Everybody is terrified that this is a sign of a global slowdown,” Art Cashin, director of floor operations at UBS, told CNBC’s “Squawk on the Street. ” “It was only eight months ago we were talking about synchronized growth and all of that is falling apart.”
Stocks also fell after The New York Times reported that U.S. Trade Representative Robert Lighthizer has told friends and associates he wants to prevent President Donald Trump from accepting “empty promises” from China on the trade front. The report also says Lighthizer has warned Trump that additional tariffs may be needed to get meaningful concessions from the Chinese. The two countries are currently negotiating a trade deal after exchanging tariffs on billions of dollars worth of their goods.
Shares of tech-related companies were among the worst performers on Wednesday morning. Netflix’s stock dropped 2.9 percent on a report that subscriber growth fell short of expectations in the fourth quarter.
Tesla shares also fell 9.6 percent after releasing weaker-than-expected delivery numbers for the fourth quarter.
All major stock indexes marked 2018 as their worst yearly performances since the financial crisis. Despite solid gains on Monday, the last trading day of 2018, the S&P and Dow were down 6.2 percent and 5.6 percent, respectively, for 2018. The Nasdaq lost 3.9 percent in 2018, its worst year in a decade.