NEW YORK (REUTERS) - US stocks joined a global sell-off on Monday (Jan 14) after a surprise contraction in Chinese trade reignited fears of a sharper slowdown in global growth and caused investors to sell riskier assets.
Oil prices fell more than 2 per cent and the safe-haven yen rose against the US dollar following the China news, which added to worries that US tariffs on Chinese goods were taking a toll on the world's second-largest economy.
"The biggest theme (in the market today) is risk-off," said John Doyle, vice president of dealing and trading at Tempus, Inc.
Data from China showed imports fell 7.6 per cent year-on-year in December while analysts had predicted a 5-per cent rise. Exports dropped 4.4 per cent, confounding expectations for a 3-per cent gain.
The United States and China - the world's two largest economies - have been in talks for months to try to resolve their bitter trade war, with no signs of substantial progress.
Adding to the gloom were weak industrial output numbers from the euro zone, which showed the largest fall in nearly three years.
Softening demand has been felt around the world, with sales of goods ranging from iPhones to automobiles slowing, prompting profit warnings from Apple among others.
Trade-sensitive shares eased, including Boeing Co and Caterpillar Inc, though US stock investors also were on edge as the US corporate earnings season kicked off.
"It will be a big thing to see if the Chinese slowdown is real, or if it is an excuse for some companies not to hit the high growth seen last quarter," said Craig Birk, chief investment officer at Personal Capital in San Francisco. "If things are really slowing down, you'll start to see it show up this quarter in earnings."
Citigroup Inc shares rose after the bank beat profit estimates as lower expenses offset a drop in quarterly revenue. JPMorgan Chase & Co and Wells Fargo & Co are set to report earnings on Tuesday.
The Dow Jones Industrial Average fell 86.11 points, or 0.36 per cent, to 23,909.84, the S&P 500 lost 13.65 points, or 0.53 per cent, to 2,582.61 and the Nasdaq Composite dropped 65.56 points, or 0.94 per cent, to 6,905.92.
The pan-European STOXX 600 index lost 0.48 per cent and MSCI's gauge of stocks across the globe shed 0.51 per cent.
US Treasury yields rose as risk sentiment improved after President Donald Trump said he was not looking to declare a national emergency amid a partial government shutdown.
Benchmark 10-year notes last fell 1/32 in price to yield 2.7024 per cent, from 2.699 per cent late on Friday.
In the foreign exchange market, the Japanese yen, a safe-haven currency that benefits in times of geopolitical turmoil, rose against the US dollar. The yen was last up 0.3 per cent against the greenback.
The prospect of slowing global growth also roiled some commodity markets. Industrial metals copper and aluminium lost ground in London and Shanghai.
Three-month copper on the London Metal Exchange ended down 0.8 per cent at US$5,897 a tonne, its lowest in more than a week.
Oil prices ended down more than 2 per cent on the global slowdown concerns.
Brent crude futures lost US$1.49, or 2.5 per cent, to settle at US$58.99 a barrel. US West Texas Intermediate (WTI) crude futures fell US$1.08 to settle at US$50.51 a barrel, a 2.1 per cent loss.