News Column

US stocks dive as new factory orders dry up

February 4, 2014

US STOCKS slumped yesterday, with the S&P 500 suffering its worst drop since June, after weakerthan-expected data on the factory sector in the world's largest economy provided investors with the latest reason to move away from riskier assets. US manufacturing grew at a slower pace in January as new order growth plunged by the most in 33 years, while construction spending barely rose in December. Investor sentiment soured sharply after the factory data, driving the cost of protection against a drop on the S&P to its highest level in nearly four months. The CBOE volatility index jumped 16.5 per cent to 21.44, its highest since December 2012 . The Dow Jones industrial average fell 326.05 points or 2.08 per cent, to 15,372.8, the S&P 500 lost 40.7 points or 2.28 per cent, to 1,741.89 and the Nasdaq dropped 106.919 points or 2.61 per cent, to 3,996.958. The Dow closed below its 200-day moving average for the first time since 28 December 2012 , a technical breakdown which could indicate further declines. Telecoms were weaker on speculation AT&T's plan to cut prices on its large shared data plans could prompt other US carriers, particularly larger rival Verizon Wireless , to offer new discounts. AT&T lost 4.1 per cent to $31.95 and Verizon lost 3.4 per cent to $46.41 . Charter Communications is discussing raising its bid for Time Warner Cable , according to sources, a move that could pressure its reluctant rival ahead of a proxy deadline. TWC shares added 0.5 per cent to $134.01 .

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Source: City A.M. (UK)

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