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U.S. stocks fall sharply, as poor Chinese data weighs on commodities

Published 09/28/2015, 04:32 PM
Updated 09/28/2015, 04:45 PM
The Dow, NASDAQ and S&P 500 all fell by more than 1% on Monday

The Dow, NASDAQ and S&P 500 all fell by more than 1% on Monday

Investing.com -- U.S. stocks fell broadly on Monday as continuing fears of a recession in China spilled over into global markets, triggering a massive sell-off in commodities worldwide.

In overnight trading, China reported that industrial profits in August slumped by 8.8% on the month, suffering its largest monthly decline on record. The disappointing data comes in the wake of weak Chinese manufacturing activity last month, underscoring worries of persisting slowness in the nation's factory sector. As a result, a large swath of commodity stocks finished among the worst performers of Monday's session, as shares in Freeport-McMoran Copper & Gold Inc (NYSE:FCX), Energy Transfer Equity and Williams Companies Inc (NYSE:WMB) all plunged by roughly 10% on the day.

The commodities sell-off weighed on all three indices, as the Dow Jones Industrial Average fell by 312.78 or 1.92% to 16,001.89, for its fourth losing session in the last five trading days. The NASDAQ Composite index and the S&P 500 Composite index also fell sharply on Monday, as biotech stocks extended significant losses from late last week. After suffering a 5% loss on Friday, the NASDAQ Biotechnology exchange-traded fund dropped by another 6% in Monday's session and is now down by approximately 15% on the month.

The NASDAQ lost 142.53 or 3.04% to close at 4,543.97 on Monday, while the S&P 500 dipped 49.57 or 2.57% to end Monday's session at 1,881.77. Both indices closed lower for the fifth consecutive session. On the S&P 500 all 10 sectors closed in the red, as stocks in the Health Care, Energy and Basic Materials sectors lagged.

Shares in Valeant Pharmaceuticals International Inc (NYSE:VRX) plunged more than 16%, after Democrats on the House Committee on Oversight and Government Reforms pushed a Republican committee chairman to force the Montreal-based pharmaceutical company to turn over documents related to a series of price hikes among its prescription drugs earlier this year. It came in response to heightened concerns of price gouging in the industry, after reports surfaced last week that New York-based Turing Pharmaceuticals allegedly raised the price of a drug aimed at treating a rare parasite infection by roughly 5,000% to $750 a pill.

The top performer on the Dow was Johnson & Johnson (NYSE:JNJ), which gained 0.37 or 0.41% to 91.37. Shares in Johnson & Johnson (NYSE:JNJ) are still down by more than 13% on the month. The worst performer was Visa Inc (NYSE:V), which fell 3.49 or 4.94% to 67.20.

The biggest gainer on the NASDAQ was SYMC, which rose 0.06 or 0.30% to 20.00. Symantech ended the day as the only performer on the NASDAQ 100 to close in the green. The worst performer on the NASDAQ was Liberty Global a (NASDAQ:LBTYA), which plummeted 4.87 or 10.15% to 43.09. Earlier, Vodafone (LONDON:VOD) confirmed that it had ended talks with Liberty Global's owner, Virgin Media, on a possible merger.

The top performer on the S&P 500 was Alcoa Inc (NYSE:AA), which surged 0.52 or 5.73% to 9.59. The world's biggest aluminum company announced on Monday that it will split into two publicly traded companies by the second half of 2016. Under the plan, Alcoa (NYSE:AA) will separate its upstream division from its value-added entities, which includes production for aerospace, automotive and construction solutions. The worst performer was Mallinckrodt (NYSE:MNK), which plunged 8.65 or 12.64% to 59.80.

On the New York Stock Exchange, declining issues outnumbered advancing ones by a 2,823 to 323 margin.

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