The Dow and the S&P 500 index are on pace for their worst quarter since 2011. The S&P was back in correction territory on the retreat and saw its sixth decline in eight sessions.
U.S. stocks forfeited their gains from the week on Friday, dropping after worrisome data came in overnight from China.
The Dow Jones industrial average slid 496 points, or 2 percent, to finish the session at 24,100. The Standard & Poor’s 500 stock index was down 1.9 percent and the Nasdaq was 2.3 percent in the red.
All 11 U.S. S&P sectors were down Friday, with health and technology leading the way. All 30 Dow stocks took losses, with health giant Johnson & Johnson suffering a 9 percent decline on a Reuters report that said the company knew for decades that there sometimes were small amounts of asbestos in its baby powder.
The Dow, down 550 points at its Friday low, and the S&P 500 are on pace for their worst quarter since 2011. The S&P 500 was back in correction territory on the retreat and saw its sixth decline in eight sessions.
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The tech-heavy composite Nasdaq is straddling break even for the week, but it is up slightly on the year. It is on track for its worst quarter since 2008.
Investors were reacting to news that the Chinese economy may be weakening.
China’s retail sales are growing at the slowest pace in 15 years, according to November data. Industrial production is down as well.
“We are getting a validation of the forecasts for lower Chinese economic growth,” said Sam Stovall, chief investment strategist at CFRA. “China contributes to the earnings growth in U.S. companies,” Stovall said. “If the second-largest economy in the world begins to stumble, it will have a ripple effect around the globe.”
Stovall said the Chinese economy is expected to grow 6.6 percent this year, while slowing to 6 percent growth in 2019. “Many are now wondering if that 6 percent forecast is too optimistic,” Stovall said.
Markets lurched all week, with the Dow bouncing hundreds of points a day as nervous investors unpacked every piece of news, looking for clues on which to trade.
Sentiment swayed by the minute as news poured out about Brexit, China, oil prices, tweets and a wild Oval Office a tense exchange between President Donald Trump, and Rep. Nancy Pelosi, D-Calif., and Sen. Chuck Schumer, D-N.Y.
“It was a volatile, nerve-wracking week,” said Kenny Polcari of Butcher-Joseph Asset Management. “Just when you think the market is settled, you get hit out of left field. It continues to revolve around the trade uncertainty. One day we are on, one day we are off. One day China is good. One day China is bad.”
“Throw in the uncertainty over next Wednesday, when the Fed is expected to announce a quarter point increase in interest rates,” Polcari said. “The concern is what they say about what’s going to happen in 2019.”
The slowing Chinese economy comes as the United States and China are negotiating their economic differences over tariffs and intellectual property. China reportedly has agreed to substantial changes for U.S. companies that seek to do business there.
The United States and China have set a 90-day deadline to reach agreement.
“Investors remain nervous about short-term events, including a small potential for a government shutdown as made clear in the Trump-Pelosi-Schumer meeting, as the relatively calm past few days returns to volatility,” said Howard Silverblatt of S&P Dow Jones Indices.
The Chinese pullback was seeping into oil markets.
U.S. benchmark crude — West Texas Intermediate — was down nearly $1, about 2 percent, and straddling just above $51 a barrel. A $50 per barrel price is a key threshold. Many oil producers find it increasingly difficult to be profitable at prices below $50.
Brent crude was trading about $60 per barrel, down more than 1 percent.