By Kate Gibson, MarketWatch –
NEW YORK — U.S. stocks fell Friday, with the major indexes recording their worst week this year, after China reported its economy slowed more than anticipated.
“The market dropped because China’s economy is slowing down more than expected,” said Jim Sloan of Jim Sloan & Associates in Houston, Texas.
“Everybody’s worried, and everybody’s unsure if the global economy can stand on its own, and China is a big part of global growth. If it slows too rapidly, that would create a lot of pain. I don’t think it will, but there’s uncertainty,” said Alan Skrainka, chief investment officer at Cornerstone Wealth Management LLC.
Still, “after an explosive 30 percent rise, we were due” for a correction, said Skrainka of the market’s climb from its October lows.
The Dow Jones industrial average fell 136.99 points, or 1.1 percent, to close at 12,849.59, leaving it down 1.6 percent from the prior week, and its most substantial weekly hit since the middle of December.
Dow component JPMorgan Chase & Co. reported a larger-than-expected profit in the first quarter. The first major U.S. bank to report results for the quarter, its shares lost 3.6 percent.
The S&P 500 dropped 17.31 points, or 1.3 percent, to 1,370.26, off 2 percent from the week-ago close, with financial and technology faring the worst and utilities and consumer staples the best performers among its 10 industry groups.
Google Inc. shares were among those hit, down 4.1 percent, as corporate-governance entities voiced concern about the most recent effort by the online search engine’s founders to retain control.
Google detailed Thursday a plan that allows it to issue new shares without diluting the voting power of founders Larry Page and Sergey Brin.
The Nasdaq composite fell 44.22 points, or 1.5 percent, to 3,011.33, leaving it down 2.3 percent from last week’s close.
The indexes also fell last week, the first back-to-back weekly losses for the S&P 500 and the Nasdaq of the year.
Oil and gold prices fell, with crude futures falling 81 cents, or 0.8 percent, to finish at $102.83 a barrel. Gold futures for June delivery fell $20.40, or 1.2 percent, to settle at $1,660.20 an ounce on the New York Mercantile Exchange.
The Thomson Reuters/University of Michigan’s initial index of consumer sentiment declined at the start of April.
A separate report, from the Labor Department, had consumer prices climbing 0.3 percent in March.
China’s National Bureau of Statistics on Friday said the nation’s annual rate of economic growth slowed in the first quarter to 8.1 percent from 8.9 percent during the prior three months.
Rising borrowing costs in Spain also weighed on sentiment.
“The world economy is being held together with baling wire and chewing gum,” Sloan said.