U.S. stocks slipped Tuesday as global growth worries were resurrected on news out of China and the World Economic Forum in Davos, Switzerland.
The Dow sank 462 points, or almost 2 percent, at its low -- dragged down by DowDuPont, 3M, Boeing and Caterpillar, companies with significant exposure to the Chinese economy.
The index rallied late in the day as presidential economic adviser Lawrence Kudlow appeared on CNBC and denied news reports that talks between President Donald Trump's administration and Chinese trade officials had been canceled. In fact, he said, no meeting was ever scheduled.
"There's no cancellations," Kudlow said. "None. Zero. Let me just try to put that to rest."
The Dow immediately snapped back but closed the day down 301 points, or 1.2 percent, at 24,404. The S&P 500 index lost 37.81 points, or 1.4 percent, to 2,632.90. The Nasdaq composite fell 136.87 points, or 1.9 percent, to 7,020.36.
The S&P slid back into correction territory, with 10 of 11 sectors down on the day. A correction is a 10 percent retreat from a recent high. It was the first S&P decline in five sessions.
The renewed volatility after several weeks of relative calm followed weekend reports from China that its official economic growth for 2018 came in at 6.6 percent, its slowest in 30 years. There was also news earlier this month that German industrial production had sharply slowed, in part because of declining exports to China.
"China is dealing with something very new, which is consumer-driven slowdown in growth," Glenn Youngkin, co-chief executive of the Carlyle Group, said during an appearance on Fox Business Network with anchor Maria Bartiromo. "One of the great recognitions is that China, which used to be this big export economy, is really driven by this giant consumer class that's been created over the last 20 years.
"And that consumer class is nervous," Youngkin said. "They're nervous for all the same reasons that other people in the world are nervous, and that's reflecting itself on the Chinese economy."
Data released Tuesday morning also indicate U.S. existing-home sales are at a three-year low.
Adding to the pessimism in the markets were additional forecasts out of Davos that global growth, including for the United States, would be less in 2019 than it was last year.
"It's going to be globally a slow-up," billionaire investor Ray Dalio told CNBC during a Tuesday interview from Davos. Dalio, co-chairman of Bridgewater Associates, warned that the country could slide into a recession in 2020.
"It's not just the United States. It's Europe. And it's China and Japan," Dalio said on CNBC's Squawk Box.
A letter from respected investor Seth A. Klarman -- which warned of a potential financial crisis rising out of global debt, international trade tensions and a retreat of the United States from the world stage -- also added to the gloom from Switzerland.
Klarman runs the Baupost Group, which manages about $27 billion. His letter was reported in The New York Times by columnist Andrew Ross Sorkin.
The sentiment is far from unanimous. Stephen Schwarzman of Blackstone Group predicted a decline in U.S. economic growth to 2.5 percent to 2.75 percent this year, well below the peak of above 4 percent in mid-2018. "I don't see any recession," he said. "I don't know where that came from the last two months of the year."
Information for this article was contributed by Marley Jay of The Associated Press.
Business on 01/23/2019