Dow Jones Industrial Average Skids Amid Renewed Global Growth Concerns
The Dow Jones Industrial Average (DJIA) dropped sharply on Tuesday, tracking global stock markets, amid renewed concerns about negative interest rates and oil’s recent rout.
The Dow Jones index fell 0.7% to 17,609.14 at 9:47 a.m. Twenty-seven stocks were declining, while three were advancing.
The S&P 500 dropped one percent to 2,045.70, and the tech heavy NASDAQ Composite was also down one percent at 4,844.78.
International Monetary Fund Managing Director Christine Lagarde warned in a speech on Tuesday that the global recovery remains “too slow, too fragile.”
In a speech at Frankfurt’s Goethe University, Lagarde called for stronger action by the world’s economies to boost growth. She said the United States should raise its minimum wage, Europe should improve job training, while emerging economies should cut fuel subsidies and boost social spending.
Most Asian stocks finished lower. Japan’s Nikkei index closed 2.4% lower. European equities were also declining.
Oil prices retreated after a surprise fall in gasoline demand in the United States amid growing doubts that oil producers can agree to an output freeze to dampen a global supply glut. West Texas Intermediate shed 0.1% to $35.66 a barrel. Oil is nearly 16% lower than its peak three weeks ago.
The gold price for June delivery rose 1.2% to $1,234.2 a troy ounce as economic and geopolitical concerns prompted cautious investors to resort to safer assets.
Data on Tuesday showed the trade deficit of the world’s largest economy widened in February to a six-month high, missing economists’ expectations.
The trade gap increased 2.6% from January to a seasonally adjusted $47.1 billion, its highest level since August, the Commerce Department said Tuesday. Economists had expected a deficit of $46.2 billion in February, according to the Wall Street Journal.
The trade deficit widened because imports increased more than exports, a sign that weakness overseas and the strong greenback may continue to weigh on U.S. economic growth.
Marvell Technology Group Ltd. (NASDAQ:MRVL) surged 12% to $10.76 after the semiconductor maker said Chief Executive Sehat Sutardja and President Weili Dai are leaving the company, effective immediately.
Allergan plc Ordinary Shares (NYSE:AGN) plunged 14.2% to $238.27 after the U.S. Treasury Department announced new rules to curb corporate tax inversion that could complicate the Botox maker’s acquisition by drug giant Pfizer Inc. (NYSE:PFE).
Walt Disney Co (NYSE:DIS) slid 1.9% to $96.82 after the world’s entertainment company said COO Thomas Staggs is departing, throwing Disney’s succession plan into disarray.
Tesla Motors Inc (NASDAQ:TSLA) fell two percent to $241.33 after the electric car maker said it had missed its sales goals for its Model X.
Walgreens Boots Alliance Inc (NASDAQ:WBA) dropped 2.3% to $84.36 after the U.S. drugstore operator reported weaker-than-expected quarterly sales.
Darden Restaurants, Inc. (NYSE:DRI) gained three percent to $65.30 after the Olive Garden parent reported adjusted quarterly profit that exceeded forecasts.
The Dow Jones is 15% higher than its 52-week low reached on August 24 and 3.4% lower than its 19 May peak.
