China growth fears slam US stock futures sharply lower
New York (Sept 1) Wall Street was set to kick off September on a downbeat note, as stock futures moved sharply lower on Tuesday after disappointing Chinese data roiled the global financial markets again.
Futures for the Dow Jones Industrial Average YMU5, -1.94% slumped 365 points, or 2.2%, to 16,143, while those for the S&P 500 index ESU5, -1.99% dropped 44.45 points, or 2.3%, to 1,924.25. Futures for the Nasdaq 100 index NQU5, -2.12% lost 97.50 points, or 2.3%, to 4,173.75.
The losses come on the back of another downbeat day on Monday, when Dow Jones Industrial Average DJIA, -0.69% ended August with the steepest monthly loss in more than five years. The S&P 500 SPX, -0.84% and the Nasdaq Composite COMP, -1.07% recorded the largest monthly declines since May 2012, with the markets weighed down by continued worries over slowing growth in China and uncertainty over the timing of the Federal Reserve’s first rate hike.
On Tuesday, fears over China once again took a toll on stock markets after the country’s official manufacturing purchasing managers’ index fell to a three-year low. The factory reading pushed stocks lower across all of Asia and sent the European equity benchmarks into red territory.
“The summer weakness [in China] could be linked to the recent Tianjin port explosion and large-scale factory closures in Beijing ahead of the WWII victory day parade on 3 September,” analysts at Barclays said in a note.
“Even so, we believe the multiyear-low PMI confirms that the economy is still not on a solid footing, and we look for a flat growth profile during the rest of 2015, with continued downside risks,” they added.
U.S. data: Investors were also waiting for PMI data out of the U.S., with the final Markit manufacturing reading for August due at 9:45 a.m. Eastern Time.
At 10 a.m. Eastern, the ISM manufacturing index is due, forecast to have slipped to 52% in August from 52.7% in July, according to economists polled by MarketWatch.
Construction-spending data for July are slated to arrive at 10 a.m. Eastern as well, while August car sales numbers will be released throughout the day.
Read: MarketWatch’s economic calendar.
Boston Federal Reserve President Eric Rosengren will give a speech on the economic outlook to the Forecasters Club of New York 1:10 p.m. Eastern. Rosengren isn’t a voting member of the Fed’s policy-setting committee this year.
Movers and shakers: Ahead of the opening bell, discount chain Dollar Tree Inc. DLTR, -0.61% is expected to report second-quarter earnings of 68 cents a share, according to FactSet estimates.
And after the market closes, H&R Block Inc. HRB, -1.31% is forecast to post a first-quarter loss of 40 cents a share.
Oil-related companies were among biggest premarket decliners as crude oil CLV5, -2.72% shaved off more than 3%. Shares of Chevron Corp. CVX, +0.70% dropped 5.5%, Transocean Ltd. RIG, -3.87% lost 3.2%, and Marathon Oil Corp. MRO, +3.84% fell 3.2%.
Other markets: Most metals prices dropped, but gold GCZ5, +0.74% put on $8.80 an ounce as investors flocked to safe-havens.
The greenback traded mixed against other major currencies, with the ICE dollar index DXY, -0.34% off 0.3% at 95.561.