U.S. stocks tumbled Monday, pushing the Dow Jones industrial average down more than 320 points after reports of sluggish U.S growth added to investor worries about the global economy. It was the biggest one-day decline for the blue-chip index in more than seven months. And the drop followed the Dow’s worst January performance since 2009.
The market stumbled from the get-go, with U.S. stocks opening lower after declines in European and Japanese indexes. Then it quickly turned into a slide as a spate of discouraging economic data on everything from manufacturing to auto sales to construction spending poured in.
By late afternoon, the sell-off accelerated further, bringing the Dow down more than 7 percent for the year. The S&P 500 index was down more than 5 percent for 2014.
Some stock watchers took the market’s decline in stride. They considered it a necessary recalibration following the market’s record highs at the end of last year.
All told, the Dow dropped 326.05 points, or 2.1 percent, to close at 15,372.80, its biggest decline since June 20, 2013. The Standard & Poor’s 500 index lost 40.70 points, or 2.3 percent, to 1,741.89. The Nasdaq composite dropped 106.92 points, or 2.6 percent, to 3,996.96.
There were signs of worry throughout the market. The VIX index, a measure of stock market volatility, rose to its highest level since December 2012. Investors shifted into U.S. government bonds, pushing yields lower and extending their sharp decline since the start of the year.
Cold U.S. weather emerged as common problem for the economy last month. Investors were discouraged Monday by a private survey showing U.S. manufacturing barely expanded last month as frigid temperatures delayed shipments of raw materials and caused some factories to shut down.
Construction spending rose modestly in December, slowing from healthy gains a month earlier.
Automakers also piled on the disappointing news, as an icy January slowed vehicle purchases.
Fresh signs of weakness in China also weighed on the minds of investors.
An official Chinese manufacturing survey released over the weekend showed factory output grew at a slower rate in January compared with December. The report released on the weekend followed an HSBC survey that showed an outright contraction in manufacturing.
Any signs of slowdown in China’s economy – the world’s second-largest – can spell bad news because it drives exports and is a key trading partner for developing countries such as South Africa and Indonesia that supply Chinese factories with raw materials.