Stocks, oil swoon on anxiety over economy
By Richard Leong
NEW YORK (Reuters) - Wall Street's recent sell-off accelerated on Tuesday, with the benchmark S&P posting its worst day in four months, stung by worries about slowing economic growth, and oil prices suffered their biggest percentage decline this year on worries about weakening demand from China.
Signs of a cooling U.S. recovery after Friday's release of disappointing data on jobs creation in March and the euro zone's festering debt crisis fueled a view of tepid global growth, stoking safety bids for gold as well as U.S. and German government debt.
Oil prices closed down below $120 a barrel in London after China, the world's second largest oil consumer, reported a decline in imports of crude oil in March, raising concerns about its oil demand and a slowdown in the Chinese economy.
The pullback on Wall Street came on the cusp of the first-quarter earnings season, with U.S. aluminum giant Alcoa kicking off the reporting season after the bell.
"We've clearly seen a major slowdown in earnings, which are dependent on global growth now that profit margins have stopped expanding, and global growth isn't great right now with all the issues in Europe," said Jim McDonald, chief investment strategist at Northern Trust Global Investments in Chicago, which has about $650 billion in assets under management.
All three major stock indexes fell below key support levels, and 80 percent of shares listed on the New York Stock Exchange and the Nasdaq Stock Market ended lower.
The S&P 500 fell below its 50-day moving average of 1,372.30, an area viewed as a significant support level that will make or break the current uptrend.
"Dropping below that level suggests a loss of momentum, and it looks pretty widespread," said Katie Stockton, chief market technician at MKM Partners in Greenwich, Connecticut, adding that the S&P 500 could fall to about 1,350 before finding a new level of support. Continued...