Weak factories data weigh on shares; euro rises

Wed Sep 23, 2015 2:04pm EDT
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By Michael Connor

NEW YORK (Reuters) - Wall Street stock prices fell on Wednesday, dragged down by economic reports portraying U.S. factories growth as tepid and China in its worst manufacturing contraction since the global financial crisis.

The data aggravated investor anxieties that global economic growth might be sputtering, sapped a rally in European equities and gave Asian stock markets their worst day in months. Prices of U.S. Treasuries and other safe-haven government debt eased.

The reports, showing U.S. manufacturing growth stayed at a two-year low in September and Chinese factory activity shrinking to a 6-1/2 year low, spurred a selloff in U.S material and industrial stocks.

The S&P materials index .SPLRCM was down 1.7 percent. The industrial sector .SPLRCI was lower by 0.9 percent.

The Dow Jones industrial average .DJI fell 68.72 points, or 0.42 percent, to 16,261.75 in choppy Wall Street trading, the S&P 500 .SPX declined 3.9 points, or 0.2 percent, to 1,938.84 and the Nasdaq Composite .IXIC added 1.10 points, or 0.02 percent, to 4,757.82.

Europe's FTSEuroFirst index of leading 300 European shares .FTEU3 had rallied on regional manufacturing reports but ended flat with a rise of 0.07 percent.

Shares in Volkswagen (VOWG_p.DE: Quote) rose 5.19 percent. It had lost about a third of its value in the previous two sessions after the German carmaker got caught up in a scandal that Deutsche Bank called an "investor's nightmare," which led to the resignation of CEO Martin Winterkorn.

The United States has accused Volkswagen of rigging its cars to conceal their emissions when the engines were tested.   Continued...

A worker polishes steel coils at a factory of Dongbei Special Steel Group Co., Ltd., in Dalian, Liaoning province, China, September 1, 2015.  REUTERS/China Daily