Thursday, March 8, 2012

Stocks sharply?lower on China?concerns

By msnbc.com news services

Wall Street stocks eased on Monday after data showing a decline in European private sector activity last month and a reduced target for China growth gave investors reason to pause.

But losses were limited in a sign investors were looking to buy on dips, a familiar pattern this year as cheaper valuations drew in those betting on an improving U.S. economy and lured investors who may have missed this year's rally.

"You'll probably have some buying on the dips, not too much of a major correction, maybe a slight drift upwards," said Doug Roberts, chief investment strategist at Channel Capital Research.com, Shrewsbury, New Jersey.

Materials shares, sensitive to signs of slowing in the commodity-hungry Chinese economy, were the biggest drags in early trading. The S&P materials sector index fell 1 percent, while aluminum producer Alcoa Inc fell 1.4 percent to $10.10.

Losses in the overall U.S. market were limited. European and Asian stocks dropped, with shares in euro zone peripheral countries such as Italy and Spain among the worst hit, after data showed the region was likely to slide back into recession.

Chinese Premier Wen Jiabao cut his nation's 2012 growth target to an 8-year low of 7.5 percent and put a priority on boosting consumer demand in hopes of weaning the economy off a reliance on external demand and foreign capital.

"I would recommend buying on dips because I think we will continue to see the jobs growth showing improvement," said Peter Cardillo, chief market economist at Rockwell Global Capital.

European markets were also pressured ahead of a March 8 deadline for Greece and private bondholders to complete a debt swap. Failure to reach agreement would put the country back on the brink of a messy default.

The FTSEurofirst 300 fell 0.4 percent. Hong Kong shares dropped 1.4 percent

Brent crude hovered near $124 a barrel on fears that Iranian sanctions were limiting supplies, offsetting a boost in Iraqi oil production. Investors have worried that a recent rise in prices could stunt economic growth.

Chevron Corp fell nearly 1 percent to $108.66, while Exxon Mobil Corp fell 0.2 percent to $86.17.

American International Group Inc is selling part of its stake in AIA Group Ltd to raise about $6 billion to help repay a huge federal government bailout. AIG shares slipped 0.3 percent to $29.74.

The S&P and Nasdaq notched their eighth week of gains out of the last nine, but momentum ran out on Friday as stocks ended lower in a thinly traded session. The S&P 500 has rallied 25 percent since closing lows in October with few pullbacks.

Reuters contributed to this report.

Source: http://bottomline.msnbc.msn.com/_news/2012/03/05/10583347-stocks-drop-amid-fears-about-economy

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