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US markets slip on weaker-than-expected manufacturing data

04 Feb 2014 Evaluate

The US markets fell sharply on Monday on getting much weaker-than-expected reading on manufacturing as well as concerns over a slowdown in China, triggering the worst selloff in several months. The S&P 500 and the Dow Jones Industrial Average ended the day with the steepest decline since June 20. US manufacturing grew less briskly in January after hitting an 11-month high the prior month as output and overseas demand slowed. Markit stated that its final US Manufacturing Purchasing Managers Index fell to 53.7 in January, matching an advance reading earlier in the month. The index hit an 11-month high of 55.0 in December. The orders from customers slowed sharply in January after hitting a more than four-year high in December, but American manufacturers blamed it largely on unusually cold and snowy weather last month. The Institute for Supply Management index sank to 51.3% from 56.5% in December, marking the lowest level in eight months. The decline was much bigger than expected.

Meanwhile, outlays for US construction projects rose 0.1% in December to a seasonally adjusted annual rate $930.5 billion, led by private projects. Private-construction spending rose 1% in December, with a 2.6% increase for residential projects and a 0.7% decline for nonresidential projects. Meanwhile, public-construction spending fell 2.3% in December.

The Dow Jones Industrial Average lost 326.05 points or 2.08 percent to 15,372.80, Nasdaq dropped 106.92 points or 2.61 percent to 3,996.96, and the S&P 500 was down by 40.70 points or 2.28 percent to 1,741.89.

Indian ADRs closed in red on Monday; Infosys was down 2.04%, ICICI Bank was down 1.19%, Tata Motors was down by 1.11%, HDFC Bank was down 0.68% and Wipro was down 0.38%.

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