New York: US stock fell on Monday, extending last week’s decline, as weak European data added to doubts about the prospects for global economic growth.
Energy shares were among the most active, falling 0.6% alongside a 1.2% drop in the price of crude oil. The drop in oil prices followed a slide of more than 6% last week on worries about world energy demand.
German business sentiment unexpectedly dropped in September, falling for a fifth successive month and showing Europe’s strongest economy was moving closer towards recession despite stimulus by the European Central Bank (ECB). European shares lost 0.6%.
Equities have advanced sharply for three months on expectations of central bank stimulus. On 6 September ECB announced its bond-buying plan and a week later the US Federal Reserve announced a third round of quantitative easing intended to bolster the economy and reduce US unemployment.
“We’re fairly neutral on the market at this point since the Fed has lessened the potential for any major disappointments, but there are still concerns out there,” said Matthew Keator, partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
He cited worries about the euro zone debt crisis and the decisions facing the US about its own mounting debt.
With the Standard and Poor’s (S&P) 500 up more than 7% so far this quarter, investors have sought new catalysts to give the market direction. Moves have been slight and volume light. The S&P 500 fell 0.4% last week, and the session with the biggest move was a 0.3% decline in the index.
The Dow Jones industrial average was down 46.48 points, or 0.34%, at 13,532.99. The S&P 500 Index was down 6.20 points, or 0.42%, at 1,453.95. The Nasdaq Composite Index was down 20.31 points, or 0.64%, at 3,159.65.
Homebuilder Lennar Corp. reported steep rises in its third-quarter earnings and revenue, while orders rose 44%. After advancing more than 4% in premarket trading, the stock fell 2.5% to $36.53.
Lennar’s results follow a similarly strong report from KB Home and together indicate that the housing market is moving toward recovery.
Questcor Pharmaceuticals Inc. plummeted 28% to $21.79 after it said it was being investigated by a US government agency over its promotional practices.