US stocks fall on global growth forecast cut


US stocks dropped as the Organisation for Economic Cooperation and Development shaved 2015 global growth forecast to 2.9 percent.

The Dow Jones Industrial Average fell 179.85 points, or 1.00 percent, to 17,730.48 on Monday, Xinhua reported.

The S&P 500 lost 20.62 points, or 0.98 percent, to 2,078.58. The Nasdaq Composite Index decreased 51.82 points, or 1.01 percent, to 5,095.30.

A further sharp downturn in emerging market economies and world trade has weakened global growth to around 2.9 percent this year — down from 3 percent forecast in September — and is a source of uncertainty for near-term prospects, the OECD said.

“The slowdown in global trade and the continuing weakness in investment are deeply concerning. Robust trade and investment and stronger global growth should go hand in hand,” OECD secretary-general Angel Gurria said.

In its latest biannual Economic Outlook, the OECD projected the global growth in 2016 and 2017 to gradually strengthen to 3.3 percent and 3.6 percent, respectively.

Meanwhile, investor sentiment was also dampened by the rising possibility of a December rate hike following the strong jobs gains in October.

US total nonfarm payroll employment increased by 271,000 in October, the largest gain since December 2014. The unemployment rate fell to 5.0 percent, the lowest since April 2008.

Many analysts believed that the US Federal Reserve will raise interest rates next month, as Fed chair Janet Yellen reiterated last week that the central bank may pull the trigger at its December policy meeting if the US economy is “performing well.”

In corporate news, shares of Priceline Group Inc. sank 9.55 percent to $1,311.39 apiece after the release of its disappointing third-quarter results.

Overseas, European equities ended sharply lower amid concerns about global economic growth, with French benchmark index CAC 40 decreasing 1.46 percent.

In Asia, China’s stocks surged for a fourth straight day Monday, after the securities regulator decided to restart initial public offerings (IPOs) and reform IPO procedures. The benchmark Shanghai Composite Index gained 1.58 percent.

The CBOE Volatility Index, often referred to as Wall Street’s fear gauge, rose 15.28 percent to end at 16.52 on Monday.

In other markets, oil prices continued its retreat on Monday as oversupplies weighed on the market.

The US benchmark, the West Texas Intermediate for December delivery, moved down 42 cents to settle at $43.87 a barrel on the New York Mercantile Exchange.

The global benchmark, Brent crude for December delivery, decreased 23 cents to close at $47.19 a barrel on the London ICE Futures Exchange.

The US dollar moved down against other major currencies on Monday as investors took profit on the greenback’s rally in the previous session following a solid nonfarm payroll report.

In late New York trading, the euro rose to $1.0757 from $1.0747 in the previous session, while the dollar bought 123.10 Japanese yen, lower than 123.21 yen of the previous session.

Gold futures on the COMEX division of the New York Mercantile Exchange rose slightly on Monday, with the most active gold contract for December delivery up $0.4, or 0.04 percent, to settle at $1,088.10 per ounce.


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