KEEPING SCORE: The Dow Jones industrial average sank 78 points, or 0.4 percent, to 18,065 as of 1:27 p.m. Eastern time. The Standard & Poor’s 500 index fell 10 points, or 0.5 percent, to 2,129. The Nasdaq composite lost 34 points, or 0.7 percent, to 5,204. Earlier the Dow fell as much as 184 points.
CHINA WORRIES: China’s exports fell 10 percent in September versus a year ago. That was a much bigger drop than in August and also a larger decline than analysts expected. China has been critical to global economic growth for a quarter century. Since the summer of 2015, stocks have periodically been roiled by worries that China’s economy was weakening.
China’s economy seemed to be doing better over the last few months, said David Chalupnik, head of equities for Nuveen Asset Management. But the data for imports and exports challenges that.
“The question is, is it just one number or is this the start of a new trend?” he said.
FINANCIALS FLOGGED: Banks took the largest losses as investors feared the latest reports mean banks won’t lend as much money to consumers and businesses around the world.
“They need U.S. growth and they need global growth to really grow earnings,” said Chalupnik.
Bank of America fell 29 cents, or 1.8 percent, to $15.74 and Citigroup skidded 64 cents, or 1.3 percent, to $48.06.
FALLOUT: Miners and other companies that make basic materials also fell. Many of those companies rely heavily on exports to China. Copper and gold producer Freeport-McMoRan gave up 51 cents, or 5.1 percent, to $9.54. Fertilizer maker Mosaic shed 66 cents, or 2.8 percent, to $23.13 while chemicals maker DuPont lost $1.05, or 1.5 percent, to $67.73.
SAFETY: Investors feared for the health of the global economy and bought government bonds, which sent yields sharply lower. The yield on the 10-year Treasury note slid to 1.73 percent from 1.77 percent. Stocks that pay big dividends did better than the rest of the market, and utility companies and real estate investment trusts traded higher. Dominion Resources added $1.54, or 2.1 percent, to $73.70 and Duke Energy picked up $1.74, or 2.3 percent, to $78.39.
TECH TROUBLE: Technology companies that rely heavily on sales to China fell. Apple broke a seven-day winning streak and fell 70 cents to $116.65. Chip-making equipment company Applied Materials shed 89 cents, or 3.1 percent, to $27.76 and scientific measuring equipment maker Texas Instruments slipped 89 cents, or 1.3 percent, to $67.57.
GLOBAL SLUMP: France’s CAC 40 retreated 1.1 percent and Germany’s DAX fell 1 percent. The FTSE 100 in Britain was down 0.7 percent. In Japan, the Nikkei 225 lost 0.4 percent while South Korea’s Kospi fell 0.9 percent. Hong Kong’s Hang Seng index fell 1.6 percent. Thailand’s benchmark index sank 2.4 percent after the death of King Bhumibol Adulyadej. The king had reigned for 70 years, which made him the longest serving head of state in the world.
STUMPF DUMPED: Wells Fargo lost 79 cents, or 1.7 percent, to $44.53 after it said Chairman and CEO John Stumpf retired as the second-largest U.S. bank deals with a scandal over its sales practices. Regulators said Wells Fargo opened bank and credit card accounts without telling customers, and also moved money between accounts and created fake email addresses to sign customers up for online banking. The company has been fined $185 million for its actions, and its stock is down 11 percent since early September.
The company had previously said Stumpf will forfeit $41 million in stock awards. Longtime executive Tim Sloan replaced him as CEO and Stephen Sanger becomes chairman.
TAKEOFF: Airlines moved higher after a shaky start. Delta reported a strong profit thanks in part to cheap jet fuel, and it plans to cut capacity to deal with lower airfares and rising salaries. Delta rose 51 cents, or 1.3 percent, to $39.78 and American Airlines climbed $1.92, or 5.1 percent, to $39.30.
THING OF BEAUTY: Ulta Salon climbed after it raised its guidance and gave strong estimates for the third quarter. The beauty products retailer rose $25.44, or 10.6 percent, to $264.41.
LONG HAUL: Railroad operator CSX climbed after its earnings were better than expected even though coal volumes keep falling. The stock rose 83 cents, or 2.7 percent, to $31.04.
OIL: Oil prices recovered from an early loss. Benchmark U.S. crude oil rose 12 cents to $50.30 per barrel in New York. Brent crude, the international standard, added 11 cents to $51.92 a barrel in London.
PUT IT ON EBAY: MercadoLibre, which runs an online marketplace and payments system in Latin America, slumped after it said eBay will sell most of its investment in the company. EBay owns about 8.1 million shares of MercadoLibre and will sell 5.5 million. MercadoLibre lost $13.83, or 7.5 percent, to $169.38.
CURRENCIES: The dollar fell to 103.49 yen from 104.25 yen. The euro rose to $1.1044 from $1.1011.