BANGKOK (AP) — A weaker-than-expected U.S. manufacturing report sent Asian stock markets down Tuesday.
U.S. manufacturing shrank in November to its weakest level since July 2009. The Institute for Supply Management said Monday that its index of manufacturing conditions fell 49.5 from October’s 51.7. Numbers above 50 signal growth, while those below indicate contraction.
One reason for the downturn, the trade group said, was that businesses are concerned about the so-called fiscal cliff, which is a package of tax increases and government spending cuts that will take effect in 2013 unless lawmakers take action. Worries about automatic tax increases cut demand for factory orders and manufacturing jobs.
President Barack Obama and Republican lawmakers have yet to work out a budget deal as the clock continues ticking toward the year-end deadline.
Ric Spooner, chief market analyst at CMC Markets in Sydney, said that while most analysts think U.S. political leaders will negotiate some kind of deal before the deadline, there will still be some degree of tax increases and spending cuts that will impinge on the growth of the world’s No. 1 economy.
“It’s important to remember that there will still be a significant fiscal drag on the U.S. economy next year. So I think markets have arrived at a level that reflects that state of affairs, or close to it,” Spooner said. “The market has arrived around a level which reflects the risk that is still out there.”
Japan’s Nikkei 225 index fell 0.2 percent to 9,441.75. Hong Kong’s Hang Seng lost 0.2 percent to 21,728.80. South Korea’s Kospi fell 0.5 percent to 1,930.68.
Australia’s S&P/ASX 200 shed 0.5 percent to 4,510.30 after the Reserve Bank of Australia, as expected, cut its benchmark interest rate by a quarter of a percentage point to 3 percent, its lowest level since the global financial crisis.
The bank voiced concerns for the Australian economy amid uncertainty over the United States’ fiscal policy and stubbornly weak conditions in Europe.
Australia’s Newcrest Mining Ltd. fell 2 percent and Energy Resources of Australia Ltd. lost 2.9 percent.
Elsewhere, struggling electronics maker Sharp gained 1.7 percent in Tokyo. Japanese news reports said Sharp and U.S. mobile phone chipmaker Qualcomm Inc. have reached a basic agreement on a capital and business tie-up.
On Wall Street on Monday, the Dow Jones industrial average dropped 0.5 percent to close at 12,965.60. The Standard & Poor’s 500 index fell 0.5 percent to close at 1,409.46. The Nasdaq composite fell 0.3 percent to 3,002.20.
Benchmark oil for January delivery was down 18 cents to $88.91 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 18 cents to close at $89.09 in New York on Monday.
In currencies, the euro fell to $1.3050 from $1.3060 late Monday in New York. The dollar fell to 82.07 yen from 82.24 yen.
Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson
More Related Stories
- New campaign compares gun control to anti-LGBT discrimination
- Study: Salt Lake City is gay parenting capital of the U.S.
- Inhofe and Coburn: Red state hypocrites
- Teen activist to meet with Abercrombie CEO
- Watch: Family emerges from storm shelter after tornado
- Must-see morning clip: Barackalypse Now
- Okla. tornado survivor reunited with dog trapped in rubble live on camera
- Is Pope Francis an exorcist?
- Oklahoma death count confirmed at 24, 9 children
- Frantic parents search for children in tornado's wake
- Crews dig through rubble after deadly tornado
- 51 killed in massive Oklahoma tornado
- Don't cry climate-change wolf
- Record tornado devastates Oklahoma
- Limbaugh: No one willing to impeach the first black president
- Tornado reduces Oklahoma City suburb to rubble
- AP: Toll at least 37 dead in Okla. tornado
- Entire Midwest on tornado warning
- Oregon senator proposes appeal to Monsanto Protection Act
- Supreme Court to rule on prayer at government meetings
- Beltway scandal machine breaks, knows nothing about America
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11