Slump in Chinese manufacturing weighs on markets

NEW YORK — More weakness in Chinese manufacturing weighed on US and European financial markets on yesterday, renewing concerns that the world's second-largest economy is slowing down. Those fears were compounded after European officials cut back their growth forecasts for that region's struggling economy.

KEEPING SCORE: The Dow Jones industrial average lost 135 points, or 0.8 percent, to 17,756 as of 3 p.m. Eastern. The Standard & Poor's 500 index lost 18 points, or 0.9 percent, to 2,063 and the Nasdaq composite fell 46 points, or 1 percent, to 4,771.

CHINA WORRIES: The Caixin magazine's purchasing managers' index for China's manufacturing sector declined to 49.4 last month from 49.7 in March. A number below 50 indicates that manufacturing is contracting. Worries about China were largely responsible for a bout of turmoil in global financial markets early this year.

"It's a reminder that the global economy is not doing particularly well," said Ian Winer, director of equity trading at Wedbush Securities. Winer noted the sell-off in energy and metals, most notably oil and copper.

WEAKNESS IN EUROPE: European officials trimmed their economic growth forecasts for the 19 countries that share the euro currency, citing an unpredictable global outlook marked by political uncertainty and weakness in emerging markets.

Although Europe's economy was surprisingly strong in the first quarter, when it regained the size it was before the 2008 financial crisis, EU Commissioner Pierre Moscovici said the recovery "remains uneven."

AUSTRALIA WORRIES: Adding to the worries about China and Europe, Australia's central bank unexpectedly cut interest rates to a record low. Australia's economy has been battered as commodity prices have plummeted and other parts of the developed world have slowed down. The news sent the Australian dollar down more than 2 percent.

PULLED DEPOSITS: The global economic worries caused more losses for two of the hardest-hit sectors in the US stock market this year: energy and banks. Energy companies in the S&P 500 slumped 2.6 percent, the most in the index, and financial stocks were close behind with a drop of 2.1 percent.

Chevron dropped $1.99, or 2 percent, to $101.32. JPMorgan Chase lost $1.48, or 2.3 percent, to $62.31, the biggest loss in the Dow Jones industrial average. Goldman Sachs fell $2.77, or 1.7 percent, to $163.44.

BLUE PILL: Pfizer jumped 90 cents, or 3 percent, to $33.70 after the company reported solid first quarter earnings that beat analysts' estimates. Pfizer saw big sales gains in some of its newest drugs, including Lyrica and vaccine Prevnar 13.

ENERGY: Benchmark US crude oil lost $1.13, or 2.5 percent, to close at $43.65 a barrel on the New York Mercantile Exchange. Brent crude, the international standard, fell 86 cents, or 1.9 percent, to close at $44.97 a barrel in London. In other energy trading in New York, wholesale gasoline fell 5 cents to $1.51 a gallon, heating oil fell two cents to $1.33 a gallon and natural gas rose four cents to $2.086 per 1,000 cubic feet.

BONDS, CURRENCIES: US government bond prices rose sharply. The yield on the 10-year Treasury note fell to 1.79 percent from 1.87 percent late Monday. The euro fell to $1.1510 from $1.1523. The dollar fell to 106.31 yen from 106.45 yen.

METALS: Gold fell $4 to $1,291.80 an ounce. Silver fell 18 cents to $17.47 an ounce and copper fell 5 cents to $2.21 a pound.