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Stocks Slide as Investors Face New Evidence of a Slowdown | |
(about 1 hour later) | |
A fresh wave of worry about the trade war’s impact on the global economy hit stock markets on Wednesday, as investors faced new evidence of a slowdown in growth. | |
The S&P 500 dropped more than half a percent at the start of trading, extending a drop that had started the day before, when a gauge of manufacturing activity showed a slowdown in factory output in the United States. | |
The decline was steeper in Europe. London’s FTSE 100 had dropped more than 2 percent by Wednesday afternoon, while stock benchmarks in Germany and France were also sharply lower. In Asia, stocks had weakened slightly, but not to the same extent experienced in Europe. Hong Kong’s Hang Seng Index closed down 0.19 percent, while the Nikkei 225 finished 0.49 percent lower. | |
On Tuesday, the World Trade Organization cut its forecast for trade growth. World trade in merchandise is expected to expand just 1.2 percent this year, in the weakest year since the heat of the financial crisis in 2009. | |
Also Tuesday, a gauge of American manufacturing by the Institute for Supply Management showed that factories had slowed in September for the second straight month. | |
In Europe, Germany has become a point of concern, with its factory orders dropping as Chinese companies, hit by tariffs on exports to the United States, purchase less German machinery. | In Europe, Germany has become a point of concern, with its factory orders dropping as Chinese companies, hit by tariffs on exports to the United States, purchase less German machinery. |
At the same time, Britain remains enmeshed in negotiations over Brexit and faces huge uncertainty over its future trading relationship with Europe. Prime Minister Boris Johnson is set to unveil a new proposal on Wednesday for the terms of leaving the European Union at a Conservative Party conference, but there is still a risk that Britain will leave the bloc at the end of the month without a deal. |