Thursday was another day that reminds investors just how sensitive the market can be in pullbacks after huge runs up. It was not the weekly jobless claims, but perhaps weak earnings and fears of another manufacturing contraction in China are the harbingers. A report on purchasing managers in China indicated contraction, with the reading under 50 and the lowest in six months. The Dow Jones Industrial Average was down 200 points earlier in the day.
Investors have been hoping for a recovery in China, not another wave of contraction. Financial stocks led the market lower, although it seems most areas of the stock market were taking a serious breather on Thursday. These are the unofficial closing bell snapshots taken right at 4:00 p.m., so they will likely change slightly as the finally closing prices come in:
- DJIA -172.78 at 16,200.56
- S&P500 -16.18 at 1,828.68
- NASDAQ -24.13 at 4,218.87
JPMorgan Chase & Co. (NYSE: JPM) was down the most of the financial stocks in the DJIA. While this was not on direct regulatory news (for once), the drop was -2.1% and shares were at $56.35 in the closing minutes of the day. Jamie Dimon speaking to media in Davos at the World Economic Forum made no difference.
The Goldman Sachs Group, Inc. (NYSE: GS) was down 1.65% at $170.83, but its contribution to the DJIA losses was actually close to triple that of JPMorgan due to the high share price and the DJIA being price-weighted rather than cap-weighted. Goldman Sachs has a lot of exposure in China, even if most is indirect.
Visa Inc. (NYSE: V) was down 1.9%, or -$4.60, at $228.39 in the final minutes of the day. This was actually the biggest culprit of the DJIA drop because its $228 share price is worth about 9% of the weighting of the index. Oddly enough, as long as Visa keeps finding new members via new cards, even in emerging countries, it will just keep making more because of its per-transaction fee structure.
3M Company (NYSE: MMM) had been the top performing conglomerate stock of late, so it is of little surprise that it dropped the most during a weak trading day. Oddly enough, there was no real news. 3M shares were down almost 1.45 at $134.62 in late-day trading right at the closing bell. This down from a recent high of just above $140.