NEW YORK – A steep fall in commodity prices led the stock market to its worst day this year Monday, as worries about the global economy resurfaced.
The Dow Jones industrial average dropped 265 points, its biggest loss in five months.
The first trigger came from China. News that the worlds second-largest economy slowed unexpectedly pummeled oil, copper and other commodities. In the stock market, companies that produce oil and mine for metals fared the worst. A slowdown in China, a huge importer of basic materials like copper, would stymie profits at those companies.
The weak data out of China is spooking a lot of investors, said Dan Greenhaus, chief global strategist at the brokerage BTIG.
Oil prices hit their lowest level since mid-December, and gold plunged below $1,400 an ounce for the first time in two years as a sell-off in metals continued from last week. Concerns that Cyprus and other troubled European countries may sell gold to raise cash have also weighed on prices for precious metals, Greenhaus said.
The Dow lost 265.86 points to close at 14,599.20, a drop of 1.8 percent. Caterpillar, a maker of heavy equipment used by miners, led the Dow lower, falling 3 percent to $82.27. The Standard & Poors 500 index slumped 36.48 points to 1,552.37, a loss of 2.3 percent.
It was the biggest drop for the stock market since Nov. 7 – Election Day – last year.
Gold prices dropped $140 to $1,361 an ounce, a 9 percent fall. Gold has now slumped $203 an ounce over the past two days.
Just seven stocks rose in the S&P 500 on Monday. Among them, Citigroup inched up 9 cents to $45.87, after the countrys third-largest bank reported earnings that beat analysts estimates. Stronger revenue from trading and investment banking lifted the banks results.
Chinas economy expanded 7.7 percent in the first three months of the year, well below forecasts of 8 percent.