New York (CNN Business)The Dow fell more than 250 points Monday after a key economic report showed that American factory activity reached its lowest level in more than 10 years.
The ISM manufacturing index dropped to 47.8 in September, compared with the Refinitiv consensus forecast of 50.1. A level above 50 marks growth. That was the lowest reading since June 2009, the last month of the recession, according to the Institute of Supply Management.
The manufacturing sector shrank for the first time in three years in August, according to the ISM index, which measures month-over-month activity...
New York (CNN Business)The Dow fell more than 250 points Monday after a key economic report showed that American factory activity reached its lowest level in more than 10 years.
The ISM manufacturing index dropped to 47.8 in September, compared with the Refinitiv consensus forecast of 50.1. A level above 50 marks growth. That was the lowest reading since June 2009, the last month of the recession, according to the Institute of Supply Management.
The manufacturing sector shrank for the first time in three years in August, according to the ISM index, which measures month-over-month activity, as the effects of the trade war and slowing global demand set in.
Manufacturers cited the US-China trade war as weighing on demand and making materials more expensive, according to the ISM.
"The disappointing data is only fanning long-standing fears of slowing global growth," said Alec Young, managing director of global markets research at FTSE Russell.
Stocks didn't like the data one bit and pared earlier gains.
The Dow (INDU) fell some 250 points, or 0.9%, while the S&P 500 (SPX) dropped 0.8%. The Nasdaq Composite (COMP) was down 0.7%.
Given the weakness in the data, the Federal Reserve could turn more dovish in its next meetings.
"We think the Fed will provide further 'insurance' interest rate cuts to try to limit the slowdown in overall growth," wrote James Knightley, chief international economist at ING.
Market expectations for a quarter percentage point rate cut later this month climbed to 65%, compared with less than 40% on Monday.
All three major stock indexes closed higher on Monday, but nevertheless recorded their worst performance of the year in the third quarter.
Gold prices, which had fallen to a near two-month low earlier, spiked higher on the manufacturing data.
Gold futures were up 1.4% at $1,485.50 an ounce.
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