Market report

Stocks fall on China woes, oil dip

NEW YORK -- Worries about the outlook for growth in China and a slide in the price of oil pushed the stock market to its biggest loss in almost seven weeks Monday.

The Standard & Poor's 500 index dropped 16.11 points, or 0.8 percent, to 1,994.29. The loss was the biggest one-day decline for the index since Aug. 5. The index is down 0.5 percent this month.

The Dow Jones industrial average fell 107.06 points, or 0.6 percent, to 17,172.68. The Nasdaq composite dropped 52.10 points, or 1.1 percent, to 4,527.69.

The losses were broad, and all 10 industry sectors that make up the S&P 500 declined. Energy stocks were the second-biggest decliners, slumping 1.4 percent as the price of oil fell. Companies that rely the most on consumer spending, such as entertainment and media conglomerates and retailers, fell the most.

Investors are nervous about China following a run of soft economic data that suggests growth in the world's second-largest economy is slowing. The worries about China helped push down the price of oil. That in turn weighed on energy stocks.

The stock market has struggled to gain traction this month as investors have weighed signs of an improving economy in the U.S. against evidence of slowing growth in both Europe and Asia.

"We've got China weighing down on stocks," said Kristina Hooper, U.S. investment strategist at Allianz Global Investors. "The lack of transparency there always creates greater uncertainty."

The price of oil dropped on concerns that Libya's production is picking up at a time when global economic indicators point to weaker demand from countries including China. Benchmark U.S. oil fell 89 cents to $91.52 a barrel. Analysts say U.S. oil could test the $90 mark sometime this week.

Smaller companies were also among the biggest decliners as investors shunned the riskier parts of the market.

The Russell 2000, an index which tracks small-company stocks, fell 1.5 percent, more than other indexes. The Russell has dropped 3 percent so far this year, compared with gains of 7.9 percent for the S&P 500 and 3.6 percent for the Dow.

Some analysts say investors should regard any pullback in stock prices as an opportunity to add to their holdings. Recent reports on the manufacturing and the service industries have been strong. Hiring is picking up and inflation remains tame.

"The fundamentals in the U.S. have been coming in strong, beyond expectations," said Doug Cote, chief market strategist at Voya Investment Management. "It's a modest pullback. If anything I would take it as an opportunity to build positions."

On Monday, stocks were also hurt by a report that fewer Americans bought homes in August as investors retreated from real estate and first-time buyers remained scarce.

The National Association of Realtors said sales of existing homes fell 1.8 percent to a seasonally adjusted annual rate of 5.05 million. That followed four months of gains. August sales fell from a July rate of 5.14 million, a figure that was revised slightly downward.

The report weighed on homebuilding stocks. Hovnanian fell 14 cents, or 3.6 percent, to $3.80 and Beazer Homes fell 52 cents, or 2.8 percent, to $18.09.

In other energy trading, wholesale gasoline fell 2.7 cents to $2.585 a gallon, heating oil dropped 3 cents to $2.687 a gallon and natural gas rose 1.3 cents to $3.85 per 1,000 cubic feet.

U.S. government bond prices rose. The yield on the 10-year government bond, which falls when prices rise, dropped to 2.55 percent from 2.58 percent.

Business on 09/23/2014

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