It wasn’t a bad start to the trading day in New York, with stocks pushing higher on the back of a clutch of promising macroeconomic reports, but the niggling doubts over global growth concerns and the political strife in Crimea have resurfaced once again.
Not only have the gains disappeared, but the worries are biting harder than any other day this week. Losses have accelerated in the afternoon session on Wall Street, with the Dow Jones plunging 1.13% or 185 points and the S&P 500 down 0.87% at 1851.9.
The early good news came from the Commerce Department, who reported a 0.3% bounce in retail sales last month after January’s steep decline, and the US Labor Department, who revealed initial jobless claims of 315,000 last week, representing a decline of 9000.
Not so encouraging was the news that business inventories climbed 0.4% in January. While this was in line with expectations, it comes tied to a 0.6% drop in business sales, pushing the stock-to-sales ratio up to 1.32 from December’s level of 1.3, the worst that ratio has reached post-recession. Like much of January’s soft data, bad weather has no doubt had a hand in this result, but regardless of what has caused inventories to back up, the reaction could well be a slowing in production until some of that unwanted stock is burnt off.