US open: Dow slides 120 points as Chinese data disappoints yet again

Shortly before 1500 BST, the Dow Jones Industrial Average was down 119 points to 16,195.95, while the S&P 500 and the Nasdaq were respectively 14 and 24 points lower.

Chinese data disappoints

Asian markets began the week on a mixed note, as sluggish data from China tempered sentiment in the region.

According to the country’s National Bureau of Statistics, industrial profits in August declined 8.8% year-on-year compared with a 2.9% drop in the previous month, registering their biggest drop since records began in October 2011.

Elsewhere, European markets were in the red, while oil prices fell, with West Texas Intermediate losing 2.37% to $44.64 a barrel, and Brent down 2.23% to $47.54 a barrel.

The dollar lost 0.20% against the yen but gained 0.30% and 0.15% against the euro and the pound respectively, while gold futures tumbled 1.28% to $1,130.90.

PCE falls flat in August

On the economic data front, according to the Department of Commerce, US 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.”

Chicago Fed president Charles Evans, a voting member of the FOMC, will give a speech on monetary policy in Milwaukee at 1800 BST, while San Francisco Fed president John Williams, also a voting FOMC member, will speak in Los Angeles at 2200 BST.

In company news, oil giant Royal Dutch Shell saw its US-listed shares fall 1.99% after it said it would stop exploration near Alaska.

Danish drug-maker Novo Nordisk gained 3.08% after the Food and Drug Administration approved the company’s Tresiba insulin product.

Alcoa rose 2.98% after the aluminium giant unveiled plans to split into two separate companies, while Kellogg slid 0.66% after saying it would buy Egypt-based Mass Food Group in a deal worth approximately $150m.