By JOSHUA NGUYENAssociated PressPublished May 15, 2019 05:56AMU.
S. stocks plunged on Wednesday as Wall Street firms said the data they are relying on to show their stocks are rising was “misleading.”
On Monday, the Dow Jones Industrial Average closed down about 2 percent for the day as analysts attributed the fall to an unexpectedly strong summer, which was followed by a series of volatile storms and hurricanes.
The Nasdaq composite fell by about 1 percent as investors feared the government’s spending plan will lead to higher borrowing costs, a sharp drop in spending and a weaker economy.
The S&P 500 dropped 2.7 percent.
The FTSE 100, which tracks the S&am stocks and bonds market, fell 2.5 percent.
Analysts at Morningstar, which is based in London, said the market is in a “very bad spot” and will likely need a lot of money from banks to help it recover from the turmoil.
The markets were hit by an “unexpected” sharp decline in summertime spending, said David Shiffman, the company’s chief investment officer.
The spending is expected to slow this year, he said.
The latest report from the National Economic Council (NEC) showed that U.S.-based companies added only 0.1 percent to the U.N. GDP in the third quarter of 2019, after a 0.2 percent rise in the previous three months.
That means the total amount of economic output grew by only 0,2 percent, the second-smallest annual gain in the first three quarters.
In addition, there was no increase in the unemployment rate in the three months to March, the lowest level in more than four decades.
The NEC said the economy added $17.6 trillion in spending, $8.1 trillion in jobs and $2.6 billion in tax revenue to the country’s economy in the quarter.
It is not clear whether the downturn is a temporary setback, but the data is showing a sharp contraction in spending.
Analyzing the data, Morningstar said the U, S&s stocks and the Dow have been in a particularly bad shape since the start of the year, when they had a record-high valuation.
The index has since been in the red, while the Nasdaq has risen nearly 1 percent.
On Wednesday, MorningStar said it sees the Dow and S&ams down about 5 percent by the end of the third-quarter, and the S.&.
stocks and Nasdaq down more than 10 percent.
That’s the biggest decline for the index since the first quarter of this year.
Analysts at the brokerage firm said the S-share index will likely be flat in the fourth quarter.
But on Wednesday, the index was up almost 10 percent for a fourth straight day.