Oil Prices, Stocks Slump On Growth Worries

AFP/APP

New York: Oil prices slumped more than four per cent, and global stocks retreated amid growth worries ahead of key US. employment data later in the week.

Major U.S. indices spent the entire day in the red, with the Nasdaq finishing down more than three percent following lackluster manufacturing data. The Institute for Supply Management’s (ISM) manufacturing index was 47.2 per cent in August, up slightly from a month earlier but still well below the 50-point mark separating expansion from contraction. ISM officials said demand remained subdued, leading to a fifth straight month of contraction.

The stock market losses come ahead of major employment data later in the week that will influence upcoming U.S. monetary policy decisions. The prior jobs report sparked a brief but dramatic sell-off in US equities, elevating recession fears before subsequent economic reports bolstered confidence.

Another weak jobs report would be a “significant headwind”, said B. Riley Wealth Chief Market Strategist Art Hogan. “Then you have two in a row, and you start to be concerned about the future of the economy and jobs,” Hogan added.

Analysts noted that September is a historically weak period for stocks. “I think there’s just profit-taking, kind of rebalancing going on there,” said  Mill Street Research Chief Strategist Sam Burns. “And now that earnings season is over, there’s much less in terms of corporate news to drive things,” Sam added.

Earlier, bourses in Europe and Asia also pulled back, while oil prices hit eight-month lows.