Stocks get snowed under again
NEW YORK — Investors are skating on thin ice, literally. Stocks slid on a cold and wet Wednesday morning on Wall Street.
The Dow Jones industrial average, the S&P 500 and the Nasdaq were all lower in early trading.
The Dow has fallen more than 7% since the start of 2014. The selling has fueled speculation about a so-called correction, typically defined as a drop of 10% or more.
In a sign of investors’ frayed nerves, CNNMoney’s Fear & Greed index continued to signal “extreme fear” in the market. But some say the selling creates an opportunity to buy stocks at a discount.
“Though nobody likes a correction, it is a normal and healthy part of the market cycle,” said Ron Florance, an investment strategist at Wells Fargo Wealth Management.
Investors have been rattled by concerns about emerging markets, where central banks have been struggling to shore up shaky currencies. Meanwhile, the Federal Reserve has been scaling back its bond-buying program.
More recently, worries about the health of the U.S. economy have weighed on stocks. Economic data for January, including a manufacturing report Monday, have been weaker than expected. While winter weather may be partly to blame, the spate of soft economic data have raised questions about the outlook for growth this year.
On Wednesday, payroll processor ADP said that 175,000 jobs were added in January. That was in line with expectations but was the slowest level of growth since August. The government will release its latest figures about job growth and the unemployment rate on Friday.
What’s moving: CVS Caremark said it will stop selling tobacco products, starting Oct. 1. Shares were down slightly in early trading.
Shares of 3D Systems plunged after the company warned that last year’s earnings will be below its previous forecast. Rival 3D printing companies Stratasys, ExOne and voxeljet all fell sharply as well.
Merck reported earnings and sales in line with forecasts, while GlaxoSmithKline raised its dividend as it posted earnings-per-share that came in slightly below expectations. Both stocks were up.
Time Warner announced a new $5 billion share buyback program as it reported slightly better-than-expected earnings. But the stock fell about 2%.
Twitter will report quarterly results after the close — the first since last year’s IPO.
Shares of mobile chip company ARM Holdings continued to slide after posting a sharp drop Tuesday. ARM’s stock has fallen by 20% since the start of 2014.
European markets were mostly higher following the release of positive economic data.
Meanwhile, Asian markets closed with mixed results. Indonesia’s economy grew by 5.7% in the fourth quarter, compared with the same period the previous year. That was better than expected and may calm fears about its ability to weather the storm battering it and the other so-called “Fragile Five” emerging markets.
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