Oct 23, 2014 4:09 AM

Stocks sink as oil falls, China factories slumber

The Associated Press

TOKYO (AP) Global stocks fell Thursday after another slump in oil prices added to doubts about the strength of global demand and China's manufacturing output grew at the slowest pace in five months.

KEEPING SCORE: European markets were lower in morning trade. France's CAC-40 was down 0.5 percent to 4,085.07 and Germany's DAX shed 0.4 percent to 8,906.64. Britain's FTSE100 lost 0.7 percent to 6,353.03. But futures indicated gains for Wall Street. Dow futures rose 0.2 percent to 16,461 and S&P 500 futures gained 0.2 percent to 1,929.60.

CHINA ECONOMY: A preliminary reading of China's massive manufacturing industry for October provided mixed messages. HSBC's factory purchasing managers index rose to 50.4 in October from 50.2 the previous month (figures above 50 indicate expansion) but the output sub-index slipped to a five month low. "While the manufacturing sector likely stabilized in October, the economy continues to show signs of insufficient effective demand," HSBC said.

THE QUOTE: "Investors seemed to have lost their mojo," said Betty Lam, sales trader at CMC Markets in Sydney. "Volumes remain unseasonably skinny and China data failed to inspire traders to step off the sidelines."

ENERGY: Oil prices extended losses after the U.S Energy Department reported an increase in oil inventories that was far larger than expected. Benchmark U.S. crude was down 28 cents at $80.24 a barrel in electronic trading on the New York Mercantile Exchange after falling $1.97 on Wednesday. The slide in energy prices in the past two weeks has raised doubts about the strength of the global economy but also offers some upside in Asia where many countries are reliant on imported fuel.

ASIA'S DAY: In Asia, Japan's Nikkei 225 closed down 0.4 percent at 15,138.96 while Hong Kong's Hang Seng fell 0.5 percent 23,281.50. Seoul's Kospi shed 0.3 percent to 1,931.65 and Australia's S&P/ASX 200 dropped less than 0.1 percent to 5,383.10. China's Shanghai Composite was down 1.0 percent at 2,302.42.

BIG EARNNGS: Later in the global day, major U.S. companies such as Microsoft, 3M, Amazon.com, Caterpillar and United Continental will be releasing earnings reports. Asian companies, including major Japanese names such as Toyota Motor Corp., are releasing their reports later in the month.

CURRENCIES: The euro was little changed at $1.2644 from $1.2646 late Wednesday. The dollar rose slightly to 107.20 yen from 107.16 yen.


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