US stocks fall after sell-off in Asia
NEW YORK -- A big drop in Asian markets sent U.S. stocks falling as investors worried once again about the global economy.
Major U.S. indexes lost about 1% Monday after China's main index plunged 6.7%, adding to a nearly 3% drop on Friday. The sell-off in Chinese shares has been fed by concerns over a tightening in bank lending that could hurt the country's economy. That in turn has weighed on markets around the globe this month.
Japan's Nikkei stock average fell 0.4% after the country's opposition party came to power in a landslide victory. European markets were also lower.
There was little U.S. economic news expected Monday, but key readings come later this week on manufacturing and employment in August that have the ability to either sustain or upset the market's massive six-month rally.
After rising more than 45% from 12-year lows in March, the Dow Jones industrial average stands about 500 points away from 10,000. Investors have grown increasingly worried that the market may have gotten too far ahead of the economy. Without evidence of actual economic growth, analysts have warned that the market's rally could fizzle in the coming weeks, especially as traders head into September, historically a rough month for the stock market.
"There's enough jitteriness to set the stage for a decline," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. "The economic numbers could neutralize the nervousness, could put portfolio managers' worries to rest."
Two big deals: between Walt Disney Co. and Marvel Entertainment, and oilfield services companies Baker Hughes and BJ Services did little to support the market.
Germany's DAX index and France's CAC-40 were down 0.8% in afternoon trading. The London Stock Exchange was closed for a public holiday.
Bond prices mostly rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.44% from 3.45% late Friday.
Two big acquisitions totaling close to $10 billion did little to excite investors Monday. Dealmaking — and companies' willingness to part with cash or take on debt — is typically seen as a sign of confidence in the economy.
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