While you were sleeping: UPDATED US stocks fall on growth concern

Stocks on both sides of the Atlantic moved lower as disappointing economic data from the US and China fuelled concern about global growth.

A fresh slide in the price of oil also weighed on sentiment. US crude settled 5.9% lower at $US31.62 a barrel. 

On Wall Street, major indexes posted modest losses for most of the session but pushed higher in the last hour of trading.

The Dow Jones Industrial Average slipped 17.12 points, or 0.1%, to 16,449.18. The blue-chip index fell as much as 167 points earlier.

The S&P 500 eased less than 0.1% to 1939.38 while the Nasdaq Composite rose 0.1% to 4620.37.

The Dow’s advance on Friday was its largest since August, while the S&P’s gain was its biggest since September.

Declines in shares of Exxon Mobil and those of Chevron, last down 2.6% and 2.4% respectively, dragged the Dow lower.

A Commerce Department report showed US consumer spending was unchanged in December, following an upwardly revised 0.5% increase in November.

Separately, the Institute for Supply Management's index of national factory activity posted a reading of 48.2 for January, the fourth straight month of contraction.

"The consumer spending numbers are a concern," Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas, told Reuters. "We keep hearing that there is pent-up consumer demand that we are going to see down the line but we've seen little evidence of that."

Disappointing China data
The latest data from China were not encouraging either as a report showed the nation's official factory gauge fell to the lowest level in three years in January, a record sixth straight month of contraction. China's official services index declined in January, though showed expansion.

"Investors are getting conflicting signals about global growth," Daniel Murray, London-based head of research at EFG Asset Management, told Bloomberg.

"It's all very confusing and it's making people nervous. Even the smallest macro event or data point can tip sentiment either way."

The recent market volatility might suggest a global economic slowdown that could affect US growth and inflation, Federal Reserve vice-chairman Stanley Fischer said in a speech in New York.

"At this point, it is difficult to judge the likely implications of this volatility," Mr Fischer noted. "If these developments lead to a persistent tightening of financial conditions, they could signal a slowing of the global economy that could affect growth and inflation in the US."

To be sure, "we have seen similar periods of volatility in recent years that have left little permanent imprint on the economy," he added.

JPMorgan Chase global equity strategist Mislav Matejka says technical and sentiment indicators have rebounded from extreme levels.

Meanwhile, Yahoo chief executive Marissa Mayer is planning to unveil cost-cutting plans that include a reduction of up to 15% of the company's workforce and the closure of several business units, the Wall Street Journal reported, citing people familiar with the matter.

Ms Mayer is expected to announce the plans after Yahoo's fourth-quarter results. Yahoo shares last traded 1.1% lower.

In Europe, the Stoxx 600 Index finished the day with a 0.2% fall from the previous close. The UK's FTSE 100 Index fell 0.4%, so did Germany's DAX Index, while France's CAC 40 Index retreated 0.6%.

UPDATED to reflect Wall Street close at 10am NZ time.

(BusinessDesk)