US close: Shares end sharply lower on growth concerns; biotech sector weighs
US stocks fell sharply on Monday as disappointing Chinese data reignited growth concerns and weakness in the biotechnology sector weighed on the broader market.
The Dow Jones Industrial Average closed down 1.9%, the S&P 500 fell 2.6% and the Nasdaq ended 3% weaker.
Chinese data disappoints
Worries about a slowdown in the world’s second-largest economy re-emerged after data from China’s National Bureau of Statistics showed industrial profits in August dropped 8.8% year-on-year compared with a 2.9% drop in July. This was the biggest fall since records began in October 2011.
PCE falls flat in August
On the US economic data front, according to the Department of Commerce, personal incomes grew 0.3% month-on-month in August, while personal spending climbed 0.4% against analysts' expectations for a 0.4% and 0.3% increase, respectively.
Personal consumption expenditure remained flat on a month-on-month basis, while it edged up from 1.2% to 1.3% compared with the same period in 2014.
"As the deflationary pressure from the stronger dollar and lower commodity prices begins to fade next year, we expect core inflation to accelerate," said Paul Ashworth, chief US economist at Capital Economics.
"The domestic economy is approaching full employment, which will put more upward pressure on both wages and prices.”
Elsewhere, a gauge of pending home sales declined 1.4% in August to its lowest level in five months.
The index from the National Association of Realtors fell to a seasonally-adjusted 109.4 from 110.9 in July.
In commodity markets, West Texas Intermediate lost 2.7% to $44.48 a barrel, and Brent fell 2.5% to $47.37 a barrel, while gold futures slid 1.2% to $1,132.00.
The dollar lost 0.4% against the yen and the euro, but nudged up 0.2% against the pound.
In company news, Valeant Pharmaceuticals tumbled after Democrats in the US House asked to subpoena the company for documents relating to drug price increases, as politicians look to crack down on price hikes on acquired drugs.
Last week, biotechnology stocks fell sharply after Hillary Clinton targeted the sector in a tweet.
Williams Cos suffered heavy losses after Energy Transfer Equity LP said it would buy the rival pipeline operator for $32.6bn.
Feeeport-McMoran was also under the cosh as base metals prices declined.
Oil giant Royal Dutch Shell saw its US-listed shares fall after it said it would stop exploration near Alaska.
US-listed shares of car maker Volkswagen slumped after German prosecutors launched a fraud investigation into former chief executive Martin Winterkorn.
Elsewhere, Novo Nordisk’s US-listed shares slipped despite the Food and Drug Administration approving the Danish drug maker’s long-acting Tresiba insulin product.
Alcoa bucked the trend, ending firmly higher after the aluminium giant unveiled plans to split into two separate companies.
S&P 500 - Risers
Alcoa Inc. (AA) $9.60 +5.84%
Reynolds American Inc. (RAI) $43.46 +1.09%
Pepco Holdings Inc. (POM) $23.93 +0.97%
Eversource Energy (ES) $49.12 +0.47%
Peabody Energy Corp. (BTU) $1.23 +0.41%
Ameren Corp. (AEE) $41.52 +0.36%
Johnson & Johnson (JNJ) $91.31 +0.34%
Symantec Corp. (SYMC) $20.00 +0.30%
Molson Coors Brewing Co. Class B (TAP) $82.47 +0.21%
Sempra Energy (SRE) $94.08 +0.15%
S&P 500 - Fallers
Williams Companies Inc. (WMB) $36.57 -12.09%
Freeport-McMoRan Inc (FCX) $8.88 -9.39%
Genworth Financial Inc. (GNW) $4.49 -9.29%
Chesapeake Energy Corp. (CHK) $6.71 -9.20%
Range Resources Corp. (RRC) $31.87 -8.92%
Allergan plc (AGN) $255.00 -8.61%
Tenet Healthcare Corp. (THC) $37.16 -8.31%
Denbury Resources Inc. (DNR) $2.46 -8.21%
Regeneron Pharmaceuticals Inc. (REGN) $453.98 -7.48%
Southwestern Energy Co. (SWN) $12.12 -6.70%
Dow Jones I.A - Risers
Johnson & Johnson (JNJ) $91.31 +0.34%
Dow Jones I.A - Fallers
Visa Inc. (V) $67.22 -4.91%
Goldman Sachs Group Inc. (GS) $173.02 -3.79%
Pfizer Inc. (PFE) $30.81 -3.39%
Unitedhealth Group Inc. (UNH) $112.61 -3.23%
E.I. du Pont de Nemours and Co. (DD) $47.36 -2.45%
General Electric Co. (GE) $24.31 -2.45%
JP Morgan Chase & Co. (JPM) $60.00 -2.39%
Merck & Co. Inc. (MRK) $48.43 -2.36%
Chevron Corp. (CVX) $75.89 -2.33%
American Express Co. (AXP) $73.38 -2.29%
Nasdaq 100 - Risers
Symantec Corp. (SYMC) $20.00 +0.30%
Nasdaq 100 - Fallers
Liberty Global plc Series A (LBTYA) $43.09 -10.15%
Regeneron Pharmaceuticals Inc. (REGN) $453.98 -7.48%
Vimpelcom Ltd Ads (VIP) $4.20 -7.28%
Wynn Resorts Ltd. (WYNN) $54.41 -6.56%
Mylan Inc. (MYL) $40.86 -6.31%
Charter Communications Inc. (CHTR) $172.10 -6.23%
Micron Technology Inc. (MU) $14.06 -5.70%
Gilead Sciences Inc. (GILD) $94.80 -5.33%
Yahoo! Inc. (YHOO) $27.60 -5.25%
Vodafone Group Plc ADS (VOD) $31.12 -5.18%