U.S equities fell sharply on Friday as weaker than expected economic data from China and Europe added to the climate of doom and gloom in the markets. Fears of weakening economic growth, falling oil prices and asbestos in baby powder were some of the headlines circulating on Friday. The Dow tumbled 500 points or -2.02%, the S&P 500 fell -1.91% and the Nasdaq declined -2.26%.
News of the slowing economic growth surfaced around midday local time as Chinese Industrial Production and Rails Sales grew at a slower pace year on year. Adding fuel to the fire, European markets also suffered declines after the IHS Markit Flash Eurozone PMI index fell to 51.7 in December, its lowest level in four years. Strong retail sales coming our form the U.S prior to the market open didn’t do enough to extinguish fears as market fell and continued to decline into the close.
Weighing on the Dow’s 500 point plunge was Johnson & Johnson (JNJ) -10% decline after reports surfaced that suggested the knew about asbestos in its baby powder for decades. See JNJ daily chart below. As a result it was no surprise that the S&P 500 Healthcare index was the worst performer declining -3.37% which losses across the board with Merk & Co (MRK) shares falling -3.2%, Pfizer (PFE) declining -1.73% and Eli Lilly (LLY) falling 2.55 % to name a few.
Shares of Apple (AAPL) declined -3.2% after an analyst slashed the iPhone shipment estimates by 20 percent. Amazon (AMZN) fell -4.01%, Microsoft (MSFT) fell -3.13% and Google (GOOGL) fell -2.03%. Feeling the brunt of poor earnings, Costco (COST) dropped 8.5% and Adobe (ADBE) -7.29%.
On the central bank front, investors will be anticipating the Federal Reserve’s interest rate decision on Thursday and look to interpret the Fed’s outlook on the economy going into 2019.