U.S. stocks opened in the red Wednesday as traders looked to further signs of weakness from China and despite a rally in Europe on the back of positive data on business activity. Oil prices gained slightly ahead of a weekly report on U.S. crude inventory.
The Dow Jones Industrial Average (INDEXDJX:.DJI) shed 16.40 points, or 0.10 percent, to 16,314. The Standard & Poor's 500 index (INDEXSP:.INX) lost 2.31 points, or 0.12 percent, to 1,940. The Nasdaq composite (INDEXNASDAQ:.IXIC) dropped 7.73 points, or 0.17 percent, to 4,829.
Seven of the 10 U.S. sectors were down after the opening bell while energy, utilities and technology stocks were gaining.
The preliminary Caixin China purchasing managers’ index (PMI) fell to 47.0 in September, well below a Thomson Reuters forecast of 47.5 and its lowest since March 2009. Readings below 50 indicate economic contraction.
“Caixin’s manufacturing PMI has not provided a particularly good reading of the health of the broader economy in recent months, so it is still too early to tell whether the Chinese economy has stumbled in September,” Julian Evans-Pritchard, China specialist at Capital Economics, said in a research note.
Asian stocks were hit by the weak economic data from China. Hong Kong’s Hang Sen dropped 2.26 percent while the mainland’s Shanghai Composite Index dropped 2.19 percent.
Markets were in the green in Europe, bouncing back from losses in the previous session caused by steep drops in mining and automotive stocks. London’s FTSE 100 Index was up nearly 2 percent in Wednesday afternoon trading while the German DAX and French CAC 40 were above 1 percent.
The American Petroleum Institute will release weekly crude inventories Wednesday morning. Last week the country’s crude stockpile dropped by 3.1 million barrels. Oil prices were up Wednesday with West Texas Intermediate crude, the benchmark for U.S. oil prices, gaining 0.22 percent to $46.46 per barrel for November delivery on the New York Mercantile Exchange. On the London ICE Futures Exchange, Brent crude for November advanced 0.53 percent to $49.34 a barrel.