Breaking News: China Manufacturing PMI Falls Short of Expectations for July

The major U.S. stock indexes tumbled at the start of the week with the selling led by a steep drop in the technology sector for a third consecutive session.

In the cash market, the benchmark S&P 500 Index settled at 2802.60, down 16.22 or -0.58%. The blue chip Dow Jones Industrial Average finished at 25306.83, down 144.23 or -0.57% and the tech-driven NASDAQ Composite closed at 7630.20, down 107.13, down 1.38%.

Facing pressure in the NASDAQ Composite Index were shares of Facebook and Netflix, which lost 2.2 percent and 5.7 percent respectively. FANG stocks Amazon and Google-parent Alphabet fell 2.1 percent and 1.8 percent respectively.

The FANG stocks weren’t the biggest losers on Monday, however. Shares of Twitter dropped another 8 percent. It was followed by a 7.7 percent loss in Take-Two Interactive, a 5.7 percent decline in Electronic Arts and a 5.5 percent pullback in Akamai Technologies.

Earnings News

Caterpillar said in its second-quarter earnings report that recently imposed tariffs will shave off between $100 million and $200 million from its bottom line in the second half. The company also reported better-than-expected earnings and raised its full-year outlook, however.

Economic News

Reports were scare on Monday with U.S. Pending Home Sales coming in 0.9% higher versus an estimate of 0.4%. It also reversed last month’s 0.5% decline.

Rattling investors, however, was a report by Reuters that Canada, the European Union, Japan, Mexico and South Korea will meet next week to discuss a response to threats made by President Donald Trump about slapping tariffs on U.S. auto imports.

Tuesday’s Early Reports

In breaking news, China reported on Tuesday that factory activity was slightly lower than expected in July, with the official manufacturing Purchasing Manager’s Index (PMI) coming in at 51.2

The Chinese manufacturing PMI had been forecast to fall to 51.3 in July from 51.5 in June, according to a poll of economists by Reuters.

China’s official services PMI also fell in July. The report showed a reading of 54.0 from 55.0 in June.

In Japan, the unemployment rate rose to 2.4%, versus a 2.3% estimate and 2.2% previous read. Preliminary Industrial Production fell by 2.1%, worse than the -0.3% forecast and -0.2% previous read.

In New Zealand, Building Consents fell 7.6% versus a 6.9% previous report. ANZ Business Confidence was -44.9. Last month the report was -39.0.

Australian Building Approvals jumped 6.4% versus a 1.1% estimate. However, the previous month was revised lower by 2.5%. Private Sector Credit hit the estimate of 0.3%, slightly better than last month’s 0.2%.