NEW YORK — Dow and the broader stock market are flashing deep red on Wednesday.
Worries about the health of the US economy have gripped investors after a worse-than-expected report on America’s manufacturing sector threw markets Tuesday. The Dow and the S&P 500 recorded their worst day in more than five weeks in response, and Wednesday isn’t shaping up to be any better.
The Dow traded down 500 points lower, down 2%. The S&P 500 was also down 1.9%, while the Nasdaq Composite fell 1.75%.
“I think yesterday’s US manufacturing PMI report was a game changer,” Fawad Razaqzada, technical analyst at Forex.com, said in emailed comments.
Tuesday’s report by the Institute of Supply Management showed America’s manufacturing sector contracted for a second month in a row in September. The index, which measures month-to-month changes in the industry, dropped to its lowest level since June 2009.
“Up until now, the US manufacturing and other sectors of the economy had remained resilient despite weakness in other economic regions like the Eurozone and China… but now investors are worried that the largest economy has also caught the cold,” Razaqzada said.
In more disappointing data, private payrolls for September undercut expectations earlier Wednesday. The report also sharply revised the August numbers down, which is adding some nervous tensions ahead of Friday’s US jobs report.
So far, American consumers have kept the economy roaring, in part because the country is near full employment. Should this change, GDP growth could get hit.