U.S. stocks caved again on Friday, pulling the S&P 500 under 2,000 for the first time since February and positioning equities for their worst week since 2011, as weak Chinese manufacturing intensified worries about the global economy.
"It's very clear that global growth is being questioned, and that China is front and center," Jim Russell, principal and portfolio manager at Bahl and Gaynor, told CBS MoneyWatch. "China is definitely slowing and what happens there matters. China is the largest consumer of many commodities, from oil to copper."
A day after Wall Street's biggest single-day decline in 18 months, the Dow industrials (DJI) plummeted more than plummeted 531 points, or 3.1 percent, to 16,460 at the close.. Down more than 6 percent from its May record, the S&P 500 (SPX) fell ell 65 points, or 3.2 percent, to 1,971. The Nasdaq Composite (COMP) shed shed 171 points, or 3.5 percent, to 4,706.
"Investors are still trying to figure out yesterday's carnage," Paul Nolte, a senior vice president and portfolio manager at Kingsview Asset Management in Chicago, said, referring to "Those are signs of weakness in the global economy, and the potential for more and real slower growth. We will probably see it in the earnings numbers, which were not fabulous," Nolte said.
Deere (DE) cut its outlook for fiscal 2015, with the world's biggest maker of farm equipment projecting sales of equipment falling more than initially forecast, as prices for corn and soybeans fell.
A measure of manufacturing in China declined to a more-than six-year low, with the August report coming in the wake of softer-than-anticipated data on exports, industrial output and retail sales from that nation last month.
Stocks in China dropped, with the Shanghai Composite Index finishing down 4.3 percent. Equities in Indonesia and Taiwan waded into bear-market terrain. European equities sold off for a third day, with the Stoxx Europe 600 Index declining 13 percent from its record and in correction mode.
There were glimmers of good news, with a report Friday indicating the eurozone economy picking up some steam in August. Markit's Eurozone Manufacturing purchasing managers index, a broad measure of business activity, rose to 52.4 in August from 51.8 last month, exceeding expectations.
West Texas Intermediate oil for October delivery fell below $40 a barrel for the first time since 2009, before ending at $40.45, down 2.1 percent and tallying an eighth weekly loss.
The turmoil in stocks, which saw equities around the around nose down, led some forecasters to predict that the Federal Reserve will hold off on raising interest rates. Until this week's rout on Wall Street, most economists expected the Fed to hike rates for the first time since 2006 at its Sept. 16-17 meeting.