Worries about weakening global growth drove the stock market lower Tuesday.
The U.S. economy may be strengthening, but the outlook elsewhere is far less encouraging. On Tuesday, the International Monetary Fund trimmed its forecast for global growth. A surprisingly weak report on industrial production in Germany, Europe’s biggest economy, added to the concerns.
Industrial companies, whose fortunes are closely tied to the global economy, led the sell-off. Government bonds rallied as investors snapped up safe assets, pushing the yield on the benchmark 10-year Treasury note near its lowest level this year.
After a weak September, the slump in stocks is showing no signs of abating in October. The Standard & Poor’s index has now dropped almost 4 percent since closing at a record on Sept. 18.
“Investors are starting to get worried that Europe is going to dent growth,” said Jack Ablin, chief investment officer at BMO Private Bank.
The Standard & Poor’s 500 index fell 29.72 points, or 1.5 percent, to 1,935.10. The index closed at a record 2,011.36 on Sept. 18.
The Dow Jones industrial average dropped 272.52 points, or 1.6 percent, to 16,719.39. The Nasdaq composite fell 69.60 points, or 1.6 percent, to 4,385.20.
General Motors was among the biggest decliners in the S&P 500 after analysts at Morgan Stanley cut their price target for the stock. The analysts predict that the automaker’s earnings will suffer as it invests heavily in production. GM’s stock dropped $1.98, or 5.9 percent, to $31.77.
The indications of slower growth in Europe and elsewhere outside of the U.S. also weighed on oil prices.
Benchmark U.S. crude fell $1.49 to close at $88.85 a barrel on the New York Mercantile Exchange, its lowest level since April of 2013. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 68 cents to close at $92.11 on the ICE Futures exchange in London.
Sliding oil prices are also hitting energy stocks, and the sector extended its losses on Tuesday. Energy companies in the S&P 500 have dropped 9.4 percent in the past month.
Gold rose $5.10, or 0.4 percent, to $1,212.40 an ounce. Silver edged up 2 cents, or 0.1 percent, to $17.24 an ounce. Copper was little changed at $3.04 per pound.
