INSUBCONTINENT EXCLUSIVE:
Wall Street's main indexes reversed course on Tuesday after data showed U.S
factory activity shrank in September to its weakest in more than a decade, deepening worries about the impact of a U.S.-China trade war on
the world's largest economy.
The manufacturing activity index showed a reading of 47.8, according to the ISM report, contracting for the
second straight month and below economists' expectations of 50.1
A reading below 50 indicates contraction.
Investors moved to the safety of U.S
Treasuries following the data that came close on the heels of a contraction in euro zone manufacturing earlier in the day.
The industrials
sector slipped 1.20%, the most among the 11 major S-P sectors.
"The PMIs across the globe have continued to deteriorate and obviously we are
in line with that deterioration
It's all due to the trade war," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Despite a prolonged
U.S.-China trade war that has hammered global growth, confidence in the domestic economy has been one of the factors that has helped the
benchmark S-P 500 climb about 18% so far this year.
However, Thomas Simons, a Jefferies economist, said the contraction does not underpin a
wider softening in the U.S
economy, as it was the result of factors including Boeing Co's production issues relating to its bestselling jets.
"Manufacturing itself is
in a recession, but it does not mean that the overall economy is in a recession."
A crucial jobs report on Friday is expected to shed
economic growth.
At 11:19 a.m
ET, the Dow Jones Industrial Average was down 190.92 points, or 0.71%, at 26,725.91 and the S-P 500 was down 16.73 points, or 0.56%, at
2,960.01.
The Nasdaq Composite was down 28.81 points, or 0.36%, at 7,970.53.
McDonald's Corp dropped 2.5% after JP Morgan said the fast food
chain's third-quarter same-store sales would be softer than analysts estimates.
Shares of online brokerage E*Trade Financial tumbled 17.9%,
the most on the S-P 500, following rival Charles Schwab Corp's move to remove commissions for online trading of stocks, ETFs and options
or Canadian exchanges.
Shares of Charles Schwab dropped 9.5%.
Semiconductor stocks Analog Devices and Microchip Technology rose after
KeyBanc upgraded the chipmakers to "overweight"
Shares of peer Xilinx slipped 4.2% after the brokerage lowered its rating to "sector weight".
Ulta Beauty advanced 5.8% as singer Jennifer
Lopez launched a new fragrance exclusively at the company's stores in the United States and an independent director bought back
shares.
Declining issues outnumbered advancers for a 1.62-to-1 ratio on the NYSE and a 1.38-to-1 ratio on the Nasdaq.
The S-P index recorded
12 new 52-week highs and three new lows, while the Nasdaq recorded 27 new highs and 54 new lows.
