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.
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