The prices of stocks and gold appeared to chase each other lower on Monday after a report said growth unexpectedly slowed in China.
The stall in the rise of the world’s second-largest economy pushed Wall Street’s major stock indexes down more than 1 percent in afternoon trading, and put heavy selling pressure on gold, oil and other commodities.
The price of gold, which has been steadily drifting lower since the worst of the Great Recession passed, dropped another 9 percent Monday after a 5 percent drop on Friday. By afternoon, the market price of an ounce of gold was at a multi-year low, $1,370.80.
Stocks, too, were continuing a pullback that began Friday after a report on falling retail sales for March. The Standard Poor’s 500-stock index slipped 1.4 percent in afternoon trading, while the Dow Jones industrial average fell 1 percent and the Nasdaq composite index lost 1.6 percent. The Dow had been off more than 200 points earlier.
“None of the economic data has been very good for the last couple of weeks,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vt., told Reuters. “I wouldn’t say this is over yet, but there are enough indicators out there to really indicate that investors should approach this market with a degree of caution which doesn’t seem to exist right now.”
China’s economy expanded 7.7 percent in the first quarter, according to a government report. While that would be far above most industrial economies, it fell well short of forecasts for an increase of 8 percent and slowed from 7.9 percent during the final quarter of 2012.
Analysts described the data variously as “a big disappointment” and a “truckload of unpleasant surprises.” The Chinese economy finally began to pick up steam toward the end of last year. The data released Monday, however, suggested that the gradual recovery was proving more fragile than most analysts had expected.
Other preciious metals were hit by heavy selling: Silver fell to its lowest since October 2010, platinum to its weakest since August and palladium to a three-month low. And crude oil was off 1.8 percent in New York trading to $89.69 after a 2 percent drop Friday.
Article source: http://www.nytimes.com/2013/04/16/business/daily-stock-market-activity.html?partner=rss&emc=rss