US stocks slump amid growth worries

WASHINGTON: US stocks dropped more than two per cent Friday as signs of slower growth spanning China, Europe and the United States, and the ongoing Greek crisis, hung darkly over the markets.

At the end of the worst quarter for global markets since 2008, the Dow Jones Industrial Average closed down 240.66 points (2.16 per cent) at 10,913.38.

The S&P 500 dropped 28.98 (2.50 per cent) to 1,131.42, and the tech-heavy Nasdaq fell 65.36 points (2.63 per cent) to 2,415.40.

Stocks took a hit "amid growing concerns about a global recession following a third-consecutive month of contraction in manufacturing activity in China and disappointing data in Europe," said broker Charles Schwab.

US Commerce Department figures pointed to weakening consumer power as incomes fell by 0.1 per cent in August for the first time in nearly two years, even as prices for goods picked up.

"It seems very unlikely that consumers can lead the economy to a faster recovery pace," economists John Ryding and Conrad DeQuadros of RDQ Economics told clients in a briefing note.

Likewise, eurozone inflation surged to a 3.0 per cent pace in September, surprising analysts and sending European markets tumbling.

Also driving sellers was the HSBC purchasing managers' index showing a contraction in Chinese manufacturing in September, for the second straight month.

Of the 30 Dow blue chips, only drug maker Merck scored a gain, adding 0.12 per cent.

Shares of one-time Dow star Eastman Kodak fell below the US$1 line for the first time, closing at 91 cents. In 1996 the long-time giant of film and image reproduction shares peaked at just over US$80, but it has been in decline ever since the photography world was swept by digital technology and home printers.

Hewlett-Packard dropped 5.6 per cent after rival Oracle's Larry Ellison continued to argue that HP vastly overpaid in its US$10.3 billion purchase of Autonomy Corp.

Alcoa, always sensitive to Chinese growth news, lost 4.9 per cent.

Casino operator Wynn Resorts fell 8.3 per cent on worries China's slowdown could hurt its crucial Macau operations.

Chinese search engine Baidu pared early steep losses and ended with a 3.1 per cent decline, after a 9.1 per cent fall Thursday.
-- AFP