Stocks Slammed As Nasdaq Closes Below 4,000 Points

Feb 3 2014, 3:56pm CST | by

If investors were hoping for a February turnaround after an ugly January, they were sorely disappointed Monday afternoon: all three U.S. indices closed well into the red after a disappointing manufacturing report raised red flags about the strength of the American economy.

The Nasdaq dipped below 4,000 points for the first time since December, closing Monday trading — the first trading day of February — at 3,996.96, for a 2.6% drop. The S&P 500 fell 40.7 points, or 2.28%, and the Dow plummeted 326 points, a 2.08% decline. All but one of the Dow’s 30 components finished the day with losses; the sole gainer was pharmaceutical company Pfizer, which finished Monday trading with an 0.66% increase.

Pfizer recently reported a decline in revenue that was largely caused by drug patent expirations that, previously, afforded Pfizer drugs exclusivity in certain markets. Monday, however, the company reversed its market declines on the news that a trial for a breast cancer drug has seen successful results. In a statement released Monday morning, Pfizer said that the drug under question demonstrated a “statistically significant and clinically meaningful improvement” in the survival rates of women with advanced and newly diagnosed breast cancer.

But thanks to weak data from the Institute for Supply Management’s index of manufacturing activity — which fell to 51.3, well below December’s 56.5 and January’s 56-point consensus — Pfizer’s market gains were the exception to Monday’s market, not the rule.

It was a “much weaker than expected report — and a big surprise,” Jim O’Sullivan, chief U.S. economist for High Frequency Economics, said in a note Monday, noting that while the text of the report suggested possible weather effects, “historically, the index has not been very sensitive to atypical weather, so the report is a bit worrying.”

Weather was certainly the culprit-du-jour over in the auto industry, which saw worse-than-expected auto sales from Ford, GM and Toyota. All three cited January’s bad weather as reasons for their sales declines, though competitor Chrysler happily noted that “the bad weather only seemed to affect our competitors’ stores as we had a great January with sales up 8%.” Ford ended Monday trading with a 2.7% decline, while GM closed with a 2.3% loss and Toyota finished 1.75% down.

Source: Forbes Auto

 
 
 

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