US stocks and the dollar dropped on Wednesday as the government data indicated that the country’s economic expansion was witnessing a slowdown, while surges in the euro triggered a pullback in the stock markets in Europe.
A modest lift at the opening bell for the stocks at the Wall Street on the news of an acquisition deal struck between Heinz Co. and Kraft Foods for the creation of the third-largest food company in North America failed to hold as the stocks started to fade after the data showed unexpectedly weak durable goods orders of the US.
According to the Commerce Department data, the plans for business investment spending dropped for the sixth consecutive month in February. The report led economists to lower their first-quarter growth estimates for the United States and forced the Federal Reserve Bank to delay interest rate hikes.
Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in New Jersey, said, “The dollar strength can sap earnings growth, but if you continue to see soft economic data here, a confirmation of decelerating growth, that will certainly affect the market.”
The Dow Jones industrial average fell 88.71 points, or 0.49 percent, at 17,922.43, while the Standard & Poor’s 500 Index dropped 7.09 points, or 0.34 percent, at 2,084.41. The Nasdaq Composite Index declined 50.75 points, or 1.02 percent, at 4,943.97.
The shares of Kraft surged over USD 25 to USD 87.
The dollar index fell 0.3 percent to 96.932 and the yen rose 0.1 percent at 119.60 to the dollar JPY=.