US stocks open lower on fears about global economy

Wall Street opened lower today (October 16th), following a day of decline across European and Asian markets. 

The Dow Jones industrial average was down 0.2 per cent, to 16,105.68 at 10:50 ET, the S&P 500 lost 0.68 per cent to 1,855.95 and the Nasdaq Composite dropped 0.67 per cent to 4,133.25.

Yesterday, the S&P 500 closed at its lowest in six months, on continued concerns about sluggish global demand and its potential impact on the US economy. Investors are also concerned that the eurozone could be hit by another recession and even deflation as inflation stands at a five-year low. 

The US Commerce Department also published figures showing retail sales fell in September for the first time in seven months. Total retail and food services sales dropped 0.3 per cent from August.

The news led to fears that the US economy may be feeling the effects of the struggling eurozone and a slowdown in China growth.

"There’s been a significant correction in US equities and that’s shaken investor confidence,” Toby Lawson, head of futures, options and cash equities trading for Asia-Pacific at Newedge Group SA told Bloomberg. "Geopolitical risks and the spread of Ebola are adding to global economic uncertainties. When the market is a state of flux, everything gets amplified."

However, positive data emerged today that could lift sentiment. It showed the number of Americans filing new claims for jobless benefits fell to a 14-year low last week, while industrial output rose sharply in September. 

Initial claims for state unemployment benefits dropped 23,000 to a seasonally adjusted 264,000, the lowest level since 2000, the Labor Department said today, quoted by Reuters.

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