The stock markets in the United States declined due to the sell-off of Chinese equities amid investors’ concern regarding China’s economic growth. The U.S. equities are moving towards recording the longest losing streak since January, according to Bloomberg.
Matt Maley, an equity strategist at Miller Tabak & Co., commented, “The situation in China is causing concern, particularly for international companies that get a good portion of their sales from overseas.”
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“We’re already starting to see cracks in the earnings picture, so if global growth is going to slow, that will make the cracks bigger,” added Maley.
Chinese equities tumble due to the report that the industrial profits in the country declined in June. Investors speculated that the intervention of the Chinese government to prevent a market selloff was unsustainable amid a slow growth.
China’s manufacturing in July dropped to its lowest level in 15 months. The Caixin and Markit Economics preliminary Purchasing Managers’ Index was 48.2% in July.
Stewart Richardson, chief investment officer at RMG Wealth Management, said, “There are a number of indicators such as the commodity prices and China showing a slowing global growth. Any deterioration in the financial markets that could be triggered by China would push back a rate hike.”
- Dow Jones Industrial Average (DJIA) – 17,440.59 (-0.73%)
- S&P 500- 2,067.65 (-0.58%)
- NASDAQ- 5,039.78 (-0.96 %)
- Russell 2000- 1,213.89 (-0.99%)
- EURO STOXX 50 Price EUR- 3,513.10 (-2.41%)
- FTSE 100 Index- 6,505.13 (-1.13%)
- Deutsche Borse AG German Stock Index DAX- 11,056.40 (-2.56%)
- Nikkei 225- 20,350.10 (-0.95%)
- Hong Kong Hang Seng Index- 24,351.96 (-3.09%)
- Shanghai Shenzhen CSI 300 Index- 3,819.09 (-8.55%)
Stocks in Focus
The stock price of Allergan increased 6% to $326.98 per share. The company decided to sell its global generics business to Teva Pharmaceutical Industries for $40.5 billion. TEVA shares rose more than 16% to $72.07 per share.
Facebook declined almost 3% to $94.17 per share prior to its earnings report on Wednesday. The social network giant disclosed that CTO Michael Todd sold 100,000 shares on July 16. Analysts at Cowen and Company and Raymond James raised their price target on FB shares to $110 SunTrust Robinson to $125.
The stock value of Mylan plummeted more than 14% to $56.37 per share. Teva Pharmaceuticals Industries abandoned its hostile takeover bid for the company after striking a deal with Allergan.