Financials and energy stocks lead losses on the S&P 500
by Anora Mahmudova and Sara Sjolin
U.S. stocks sold off sharply Tuesday, with the Dow industrials dropping 190 points, as weaker-than-expected manufacturing data in China renewed worries about global growth and sent investors scampering from riskier assets.
A surprise interest-rate cut in Australia added to global economic jitters.
The S&P 500 slumped 20 points, or 1.2%, to 2,061, with nine of the 10 main sectors trading lower. Energy and materials led the losses, falling about 2%, following a drop in oil prices. Financials were also hit hard, down 1.9%.
“On risk-off days when investors are worried about global growth the assumption is that the Federal Reserve will refrain from raising rates. It is common to see financials sell off when investors think rates will stay lower for longer,” said Maris Ogg, president at Tower Bridge Advisors. Lower rates hurt bank lending margins.