The Wall Street Journal reports,the Dow Jones Industrial Average briefly dipped below 16000 Friday morning for the first time this year, as the rout in emerging markets continued to spillover into U.S. stocks. The last time the Dow was below 16000 on an intraday basis was on Dec. 18, the day the Federal Reserve announced it would start dialing back its bond-buying program.
Friday’s 200-point decline, combined with yesterday’s 176-point tumble, marked the Dow’s biggest two-day drop since June. At Friday’s session low, the Dow was down 2.9% for the week, on track for its worst weekly performance since May 2012.
WSJ’s John Shipman says the large “industrials” are the stocks that are leading the market lower:
“The real “industrials” in the Dow — the big manufacturers like United Technologies Corp., Boeing Co., 3M Co., General Electric Co. and Caterpillar Inc.with significant exposure to the fortunes of developing markets overseas — getting roundly hammered and doing the lion’s share of damage to the index today.Worries about China, global growth and expanding turmoil in emerging-market currencies all weigh heavily on sentiment toward riskier assets. Boeing, United Technologies, 3M and Caterpillar combine for roughly 40% of the Dow’s drop. Industrials are the S&P 500′s worst-performing sector, down 2.3%.”
The stock market’s slide comes amid concerns over how the developing world will cope with the withdrawal of global stimulus. Currencies in places such as Turkey and South Africa fell to fresh lows on Friday. Fears are escalating that emerging-market countries may not be able to support their currencies or prop up their growth.
