February Follows January Stock Slide

Following the worst January in years, stocks continued to fall on the first trading day of February. The Dow fell more by about 1 percent early Monday after a much worse-than-expected reading on manufacturing activity. The S&P 500 and Nasdaq were also down about 1 percent.

The most recent index report from the Institute for Supply Management showed that January manufacturing activity expanded at its weakest pace since May 2013.  This bad news comes after a rough January. Disappointing earnings and volatility in emerging markets sent stocks sharply lower during the first month of the year. The Dow tumbled more than 5 percent last month, its worst January since 2009.

Many economists feel the market could continue its slide even further. After big gains in 2013, many feel that a correction, defined as a decline of 10 percent or more, is in store. Last year, stocks took a small step back in spring, but there has not been a correction in more than two years.  

Corporate earnings reports have been a mixed bag so far. Several companies reported better than expected results pushing their stocks higher. Herbalife (HLF) topped fourth quarter forecasts and  Radio Shack (RSH) gained on plans for redesigned stores. Automakers did not fare as well with Ford (F). General Motors (GM), and Toyota (TM) all reporting larger declines in sales than estimates.