US stocks decline on China GDP forecast

NEW YORK: US stocks dropped Monday as worries about the slowing global economy after China lowered its growth estimate eclipsed positive numbers on the US services sector.

The Dow Jones Industrial Average dipped 14.76 points (0.11 percent) to finish at 12,962.81.

The broad-based S&P 500 shed 5.30 points (0.39 percent) to 1,364.33, while the tech-rich Nasdaq Composite lost 25.71 points (0.86 percent) to 2,950.48.

Stocks pared losses in drifting trade, analysts said.

The markets were "shrugging off an upbeat read on US services sector activity, amid a flare-up in global economic concerns courtesy of China cutting its growth forecast to the lowest level since 2004 and a disappointing eurozone business activity report," Charles Schwab analysts said.

Markets were under pressure after China's premier, Wen Jiabao, announced the world's second-biggest economy was targeting growth of 7.5 percent in 2012, below the 8.0 percent-plus rate in recent years and the lowest target in eight years.

Dow member Alcoa was the blue-chip index's worst decliner, tumbling 3.6 percent to US$9.87. Caterpillar skidded 2.1 percent to US$110.09.

American International Group rose 2.0 percent. The bailed-out insurer plans to sell a chunk of its stake in Hong-Kong listed AIA to help repay its debt to the US government.

Citigroup fell 1.2 percent. After the market closed Friday, the bank said that board chairman Richard Parsons, who guided Citi through the 2008 financial crisis, would not seek reelection in April.

Apple shed 2.2 percent to US$533.16 ahead of Apple's expected unveiling on Wednesday of the next generation of its iPad tablet computer.

Yahoo! dropped 0.7 percent to US$14.62 after the Dow Jones website All Things Digital reported the struggling Internet giant is preparing "thousands" of job cuts. -- AFP