State and Nation Business

Stocks fall on signs of slowing global economy

NEW YORK – As evidence of a slowing global economy grows, investors are showing some caution just one week after U.S. stocks hit an all-time high.

Stocks fell Wednesday amid fresh signs of weakness in Europe, where car sales are plunging and unemployment is rising. A lackluster earnings report from Bank of America and an apparent drop in demand for Apple’s iPod and iPhone contributed to the selling, dragging financial and technology stocks lower.

On Monday, stocks sank after a report showed slower-than-expected growth in China. Metals, energy and other commodities have been hit hard this week and that has dragged down the stocks of miners and drillers and companies that provide services to them.

The Dow Jones Industrial average fell 135 points, or 0.9 percent, to 14,622 as of 3:13 p.m. Wednesday, wiping out most of the gains made Tuesday. The Dow is down 1.6 percent this week after slumping 265 points on Monday, and is almost 2 percent below the all-time high of 14,865 reached last Thursday.

Despite the recent selling, the Dow is still 11.6 percent higher this year and the S&P 500 is up 8.8 percent. And while falling energy prices may hurt energy stocks now, in the long run they should put more money into the pockets of consumers and drive spending.

Reports this week have added to a picture slowing global growth.

New car sales in Europe fell 10 percent in the first quarter, the European automakers association said Wednesday, as high unemployment saps demand for big purchases. Britain said Wednesday that unemployment rose to 7.9 percent during the three months ending in February, an increase of 0.2 percent from the previous three months.

Technology stocks also fell sharply, led by Apple. The Nasdaq composite index fell 59.4 points, or 1.8 percent, to 3,204. Apple, which makes up 8 percent of the index, slumped 5.5 percent to $403.

, after a supplier hinted at a slowdown in iPhone and iPad production.

Corporate earnings for the first three months of the year are showing that economic growth has been slow and steady, rather than robust as investors had hoped, said Kevin Mahn, president of Hennion and Walsh Asset Management. Consumers and businesses are still reluctant to ratchet up spending.

“We’re moving ahead, but begrudgingly and very slowly,” said Mahn, “I don’t think that the plough horse is going to start stepping backwards but it certainly doesn’t have the capacity to start speeding up, at least right now.”

Analysts expect first-quarter earnings to rise by 1.6 percent, compared with growth of 7.5 percent in the same quarter a year, according to data from S&P Capital IQ. So far, 56 companies have reported earnings this year and 35 have beaten expectations.

Among other stocks making big moves on Wednesday, Textron, a maker of small aircraft, plunged 14 percent to $25.39 after the company cut its outlook for business jet deliveries. Fairway climbed 31 percent to $16.98 on its stock market debut, even after the grocery store chain priced its initial public offering above expectations.

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