The Dow Jones Industrials on Monday had its largest percentage point drop since June after factory data and worry about emerging markets put pressure on stock prices.
The Dow Jones Industrial Average fell 326.05 points to 15,372.80, a 2.08 per cent decline. The gauge has fallen 7.3 per cent this year to a three-month low. The Standard & Poor’s 500 fell 2.28 per cent to 1,741.89, its lowest close since October 17. All but nine stocks in the index slipped, Bloomberg news reported.
The Nasdaq composite index fell 2.61 per cent to 3,996.96.
The markets appeared to be troubled by data released on Monday. General Motors and Ford each fell after reporting declines in January auto sales. Sales of cars and light trucks fell 12 per cent for GM and 7.5 per cent for Ford, according to company statements.
Extreme cold and snow in January also kept some buyers out of auto showrooms.
The Institute for Supply Management (ISM) reported negative data for January, saying its index of purchasing managers fell to 51.3 from 56.5. Economists expected the index to go down, but only to 56 points.
“The sharp drop in the ISM data, which is an indicator of mood, shows that manufacturing in the US are taking seriously economic fissures in emerging markets,” analyst Rober Halver of the Baader Bank said.
The Dow and S&P 500 have hit record highs in recent weeks. The Dow’s close at 16,576.66 on December 31 was a record and the S&P’s close of 1,848.38 set a record on January 15. The declines have led observers to speculate that the market is in a correction.
Some observers say a correction is inevitable after the way investors drove up prices during 2013.