Wall Street slips on weak China trade data

A file picture of traders working on the floor of the New York Stock Exchange. PHOTO: AFP
A file picture of traders working on the floor of the New York Stock Exchange. PHOTO: AFP

NEW YORK (REUTERS) - U.S. stocks were lower on Tuesday after weak China trade data added to worries about slowing global economic growth.

Data showed Chinese imports fell 20 per cent in September due to weak domestic demand, indicating that growth in the world's second-largest economy was sputtering.

The selloff was broad based - all 10 major S&P sectors were down, with the industrial sector's 0.54 per cent fall leading the decliners.

"It's the first piece of news we've gotten out of China for some time and those weak import numbers add evidence that their economy hasn't strengthened since we last got data on the PMI readings," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Energy stocks were under pressure as crude prices slipped after the International Energy Agency said markets would remain oversupplied for at least another year.

At 9:32 a.m. ET, the Dow Jones industrial average was down 77.93 points, or 0.45 per cent, at 17,053.93, the S&P 500 was down 9.78 points, or 0.48 per cent, at 2,007.68 and the Nasdaq composite index was down 27.60 points, or 0.57 per cent, at 4,811.04.

Shares of Johnson & Johnson fell 1.3 per cent to $94.78 after it reported weak third-quarter sales. The stock was the biggest drag on the S&P 500.

Molson Coors rose 9.2 per cent to $86.00 after SABMiller agreed to be bought by AB Inbev for about $106 billion. The deal is likely to result in the disposal of SAB's 58 per cent stake in its U.S. joint venture with Molson Coors.

Twitter rose 1.6 per cent to $29.21 after the social media company said it expects third-quarter revenue to be at or above the high end of its forecast and that it was cutting 8 per cent of its workforce.

JetBlue fell 4.9 per cent to $25.55 after JPMorgan cut its rating on the stock to "neutral." Fed Governor Lael Brainard said on Monday the central bank should wait for clear signs that the U.S. economic recovery could weather global financial turbulence before raising interest rates.

Brainard's comments were in contrast to that of other Fed policymakers, including Fed Vice Chair Stanley Fischer, who have said they could support a rate increase in December.

New York Fed President William Dudley is scheduled to speak later on Tuesday.

Even as the market awaits the first rate hike since 2006, investor focus has shifted to corporate results for signs of any impact from the global slowdown.

JPMorgan and Intel report after the close on Tuesday, with Goldman Sachs, Bank of America, Wells Fargo and Citigroup posting results through the week.

S&P 500 companies are expected to report a 4.8 per cent fall in third-quarter profit, the biggest decline in six years, according to Thomson Reuters data.

Declining issues outnumbered advancing ones on the NYSE by 2,079 to 454. On the Nasdaq, 1,646 issues fell and 472 advanced.

The S&P 500 index showed one new 52-week highs and two new lows, while the Nasdaq recorded four new highs and eight new lows.