Stocks fall on Asia's gloomy economic outlook
US stocks faltered Monday after the World Bank said Asia's economies won't grow as much as expected this year. The Dow Jones Industrial Average fell 36 points to 13574 an hour after the opening bell.
In addition, U.S. companies are expected to report a profit decline when the earnings season starts on Tuesday. FactSet says companies in the Standard & Poor's 500 index are expected to post an overall profit decline for the first time in 11 quarters.
An hour after the opening bell, the Dow Jones industrial average was down 36 points at 13,574. The Standard & Poor's 500 index fell six points to 1,455 and the Nasdaq composite gave up 20 points to 3,117.
The World Bank warned that a "more pronounced slowdown" is possible in China, the world's second largest economy. It also cut its overall growth forecast for developing countries in Asia.
Slower growth in Asia could drag down the U.S. economy. One of the few bright points for the U.S. during the recession was tremendous growth in export demand by developing nations in Asia and other regions.
Even though the U.S. economy isn't doing badly, investors have been counting on growth in Asia for help, said Rex Macey, chief investment officer at Wilmington Trust Investment Advisors. "You'd rather fire on multiple cylinders than just one cylinder," Macey said.
Wal-Mart Stores and American Express shares didn't move much after they announced a reloadable prepaid card with no recurring or overdraft fees. But the news hammered shares of prepaid card competitor Green Dot Corp., which has also offered a card with Wal-Mart. Green Dot fell $2.50, or 19.5 percent, to $10.35.
UnitedHealth Group rose 59 cents to $57.72 after the health insurer said it would pay $4.9 billion in cash to buy most of Brazilian health benefits and hospital services provider Amil Participacoes. UnitedHealth was recently added to the Dow Jones industrial average, where it was the biggest gainer on Monday.
U.S. government bond trading was closed for the Columbus Day holiday.