Stocks shaken by China report, but recover from early plunge

NEW YORK (AP) - Bank stocks were shaken Thursday after a steep drop in China's exports made investors worry again about the health of the world's second-largest economy. U.S. stocks gradually recovered most of their losses as safer investments like utilities traded higher.

Indexes took big losses early on after major Asian markets skidded overnight. The Dow Jones industrial average dropped as much as 184 points. Industries that depend heavily on China and global economic growth, like technology and energy companies, also fell. As the day wore on, though, investors bought utilities, real estate investment trusts, and other stocks that tend to pay big dividends.

And they seemed to reconsider how well China's economy is doing. Over the last few months it appeared to be getting stronger, said David Chalupnik, head of equities for Nuveen Asset Management.

The Dow dipped 45.26 points, or 0.2 percent, to 18,098.94. The Standard & Poor's 500 index fell 6.63 points, or 0.3 percent, to 2,132.55. The Nasdaq composite sank 25.69 points, or 0.5 percent, 5,213.33.

China's exports fell 10 percent in September compared with a year ago. That was worse than analysts expected, and it was also a much bigger drop than in August. China has been critical to global economic growth for a quarter century, and since the summer of 2015, stocks have periodically been roiled by worries China's economy was weakening.

Financial firms took the largest losses as investors feared the latest reports on China mean banks won't lend as much money to consumers and businesses around the world. Bank of America fell 20 cents, or 1.2 percent, to $15.83 and Bank of New York Mellon skidded $1.03, or 2.6 percent, to $39.09.

Wells Fargo lost 57 cents, or 1.3 percent, to $44.75 after it said Chairman and CEO John Stumpf retired as it deals with a scandal over its sales practices. Last month regulators said Wells Fargo opened bank and credit card accounts without telling customers and also moved money between accounts and created fake email addresses to sign customers up for online banking. The second largest U.S. bank has been fined $185 million for its actions, and its stock is down 11 percent since early September.

 

Longtime executive Tim Sloan is replacing Stumpf as CEO and Stephen Sanger becomes chairman.

 

Stocks that pay big dividends did better than the rest of the market, and utility companies and real estate investment trusts traded higher. Dominion Resources added $1.15, or 1.6 percent, to $73.31 and Duke Energy picked up $1.29, or 1.7 percent, to $77.94.