By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- Stocks on Wall Street started 2014
sharply lower after data pointed to a slowdown in manufacturing
expansion in China and the United States.
The Dow Jones Industrial Average (DJI) dropped 139 points, or
0.8% to 16,437.56.
The S&P 500 (SPX) shed 17.52 points, or 1% to 1,830.96.
Broad-based losses on the S&P 500 were led by the technology
and energy sectors. The technology-heavy Nasdaq Composite (RIXF)
dropped 39.20 points, or 0.9% to 4,137.57.
The Dow and S&P 500 both ended 2013 at record highs on
Tuesday and U.S. markets were closed on Wednesday for New Year's
Day.
Thursday's losses came as data raised some concerns about
manufacturing growth. China's official manufacturing purchasing
managers index fell in December to 51.0 from 51.4 in the previous
month, pointing to the difficulties facing exporters.
In the U.S., the Institute for Supply Management reported that
its closely followed manufacturing index slipped to 57% in December
from 57.3% the month before. The level indicates a slower but
still-healthy pace of expansion.
Upbeat data on jobless claims did little to cheer investors.
Initial weekly claims for unemployment benefits fell by 2,000 to
339,000 last week, the Labor Department reported.
"Today's jobless claims and manufacturing data were positive and
show continued momentum in the economy," said Quincy Krosby, market
strategist at Prudential Financial.
"The ISM headline number was not spectacular, but if you look at
the details, new orders were sharply up. The improving economy is
also reflected in 10-year Treasury yields, which are marching
higher. All this bodes well for stocks, so we see today's pullback
as profit-taking and consolidation."
Yields on the 10-year Treasury note (10_YEAR) traded near
3%.
"Retails investors, who are usually the 'morning' traders, are
readjusting their portfolios after great returns," Krosby said. "We
will be watching what happens at the end of the trading session
carefully, particularly 'buy' orders from professional money, such
as pension funds, which usually take advantage of such dips."
* Stocks move on analysts ratings: Apple Inc. shares dropped
1.4% after Wells Fargo downgraded the iPhone maker to market
perform from outperform. Losses in Apple shares dragged the
technology sector as well as the Nasdaq Composite down.
* Sprint Corp. shares fell 4.4% after Cowen & Co. downgraded
the firm to market perform from outperform. However, analyst Colby
Synesael raised the price target to $8.25 from $7.50. "We still
believe Sprint is a 'concept stock' and that valuation is more
subjective, but using our assumptions it is fairly valued,"
Synesael wrote.
* Urban Outfitters Inc. climbed 2.6% after Jefferies analysts
upgraded the stock to buy, citing it as a top pick for 2014,
according to the Analyst Ratings Network.
* Twitter Inc. shares rose 1.9% after a volatile December. The
stock surged over the month, despite a tumble in some of the final
days.
* The comment: Nouriel Roubini -- a.k.a. 'Dr. Doom' -- is
getting optimistic. The respected New York University economist has
been pivoting toward a more optimistic outlook over the past few
months. Now, his latest 2014 outlook definitely bolsters his
nascent bullish credentials.
More must-reads from MarketWatch:
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Apple slips, Urban Outfitters up on analyst call
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