U.S. equities markets dropped today on weak manufacturing data that raised the odds of an economic recession, while crude oil prices hit an all-time high of $100 a barrel at midday in New York due to a weakening U.S. dollar and concern about violence in Nigeria.
The Dow Jones industrial average closed down 220.86, or 1.67%, at 13,043.96; the S&P 500 fell 21.19, or 1.44%, ending at 1,447.17; and the Nasdaq composite closed down 42.65, or 1.61%, at 2,609.63. All numbers are preliminary.
The Institute for Supply Managements ISM manufacturing index fell in December to 47.7, a 56-month low, which is consistent with contracting industrial activity. The ISM is one of the two major monthly U.S. economic reports, along with the employment data due out on Friday. Wall Street analysts expect the December jobs report to determine how much the Federal Reserve will lower the funds rate at its Jan. 29-30 meeting. Fed funds futures have priced in a 100% chance of a quarter-point cut and a 25% chance of a half-point cut.
Meanwhile, crude closed today at $99.62.
Were flirting with a recession, said David Resler, chief economist at Nomura Securities in New York, who added the make-or-break factor will be whether the labor market continues to hold well or not.