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Stocks drop sharply at the open; oil prices fall further

Stocks fell sharply at the open Monday as oil prices continued to slide lower and a regional economic report pointed to manufacturing weakness.

The Dow Jones industrial average fell more than 100 points, or 0.7%, in early trading. The Standard & Poor's 500 index dropped 0.5% and the Nasdaq composite index was down 0.4%.

U.S. benchmark crude was down 0.6% to $42.20 a barrel after earlier falling below $42 a barrel.

The Federal Reserve Bank of New York said Monday that its Empire State manufacturing index plunged to minus 14.9 from a positive reading of 3.9 in July. That is the lowest level since April 2009. Any reading below zero indicates contraction.

Overseas, European markets turned lower in late trading as Germany’s DAX index was down 1% and France’s CAC 40 index fell 0.3%. Britain’s FTSE 100 dropped 0.5%.

Greek stocks rose 1.2% as European finance ministers approved a $29 billion bailout for Greece to rebuild its economy late Friday. German lawmakers will decide on the package on Wednesday.

Japan’s Nikkei 225 index gained 0.5% while Hong Kong’s Hang Seng index lost 0.7%. The Shanghai Composite was 0.7% higher.

Chinese authorities slightly raised the daily level for the yuan Monday, which is allowed to rise or fall by 2% against the dollar each day in the spot markets.

Japan’s economy contracted 1.6% in the April-June quarter on bad weather and slowing China demand, according to the latest government data.

Prime Minister Shinzo Abe has championed a huge stimulus program aimed at kickstarting economic growth, but analysts say the poor results so far suggest the central bank may pump in even more money in the coming months, which would also support the stock market.

Major U.S. benchmarks ended higher Friday as investor sentiment steadied after a rocky week.

Jane Onyanga-Omara
Published on:
August 17, 2015
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