Weak forecast on Asian economy sends stocks lower
By JOSHUA FREED AP Business Writer October 8, 2012 9:16AM
U.S. stocks fell on Monday after the World Bank said Asia’s economies won’t grow as much as expected this year.
In addition, U.S. companies are expected to report a profit decline when the earnings season starts on Tuesday. FactSet says companies in the Standard & Poor’s 500 index are expected to post an overall profit decline for the first time in 11 quarters.
A half-hour after the opening bell, the Dow Jones industrial average was down 49 points at 13,561. The Standard & Poor’s 500 index fell six points to 1,455 and the Nasdaq composite gave up 17 points to 3,119.
European markets were also lower. The CAC-40 in France fell 1.2 percent, the FTSE 100 in Britain was down 0.7 percent, and the German DAX was down 1.4 percent.
The World Bank warned that a “more pronounced slowdown” is possible in China, the world’s second largest economy. It also cut its overall growth forecast for developing countries in Asia.
Slower growth in Asia could drag down the U.S. economy. One of the few bright points for the U.S. during the recession was tremendous growth in export demand by developing nations in Asia and other regions.
UnitedHealth Group rose 97 cents to $58.10 after the health insurer said it would pay $4.9 billion in cash to buy most of Brazilian health benefits and hospital services provider Amil Participacoes. UnitedHealth was recently added to the Dow Jones industrial average, where it was the biggest gainer on Monday.
U.S. government bond trading was closed for the Columbus Day holiday.