AP/Paul SancyaChevrolet Volts on the assembly line at a General Motors plant in Hamtramck, Michigan. GM's stock sank Tuesday; analysts predict its earnings will suffer as it invests heavily in production. By STEVE ROTHWELLNEW YORK -- The prospects of weakening global growth weighed on the stock market Tuesday.
U.S. growth may be strengthening, but the outlook elsewhere is far less encouraging. On Tuesday, the International Monetary Fund trimmed its forecast for global economic growth. A surprisingly weak report on industrial production in Germany, Europe's biggest economy, added to the concerns.
Industrial companies, whose fortunes are closely tied those of the global economy, led the sell-off. Government bonds rallied as investors snapped up safe assets, pushing the yield on the benchmark 10-year Treasury note close to its lowest level of the year.
After a weak September, the slump in stocks is showing no signs of abating in October. The Standard & Poor! 's index has now dropped almost 4 percent since closing at a r! ecord Sept. 18.
"Investors have become a bit more cautious about earnings and about the pace of global growth," said Kate Warne, a principal at Edward Jones, an investment firm. "That reassessment is leading to a bit more caution on stocks."
The Standard & Poor's 500 index (^GPSC) fell 29.72 points, or 1.5 percent, to 1,935.10. The index closed at a record 2,011.36 on Sept. 18.
The Dow Jones industrial average (^DJI) dropped 272.52 points, or 1.6 percent, to 16,719.39. The Nasdaq composite (^IXIC) fell 69.60 points, or 1.6 percent, to 4,385.20.
General Motors (GM) was among the biggest decliners in the S&P 500 after analysts at Morgan Stanley cut their price target for the stock. The analysts predict that the automaker's earnings will suffer as it invests heavily in production. GM's stock dropped $1.98, or 5.9 percent, to $31.77.SodaStream (SODA) was another big loser. The company said it isn't winning over e! nough new customers in the U.S. and reported preliminary sales results that fell short of Wall Street's expectations. The stock tumbled $6.05, or 21.9 percent, to $21.52.
Stocks started the day lower after a report showed that German industrial output fell 4 percent in August, far more than expected. The slump follows other disappointing economic reports and suggests Europe's economy will not recover as strongly as hoped in the third quarter.
The prospect of slowing growth in other parts of the world weighing on corporate profits was behind the sell-off Tuesday, said Jack Ablin, chief investment officer at BMO Private Bank. Companies will soon start reporting earnings for the third quarter and investors will be watching out for their forecasts for the rest of the year.
"Investors are starting to get worried that Europe is going to dent growth," Ablin said. "It's an open invitation for managements to lower their guidance."
The IMF trimmed its outlook ! for global economic growth this year and next, mostly because of weaker! expansions in Japan, Latin America and Europe. The IMF said Tuesday that the global economy will grow 3.3 percent this year, slightly below what it forecast in July.
Many analysts say, though, that the investors have no need to panic and should focus on the signs that the U.S. economy is strengthening.
"Investors should remain comfortable at these levels and not be panicked by the recent volatility," said Sean Lynch, a managing director of global equity research and strategy for Wells Fargo Private Bank.
The indications of slower growth in Europe and elsewhere outside of the U.S. also weighed on oil prices.
Benchmark U.S. crude fell $1.49 to close at $88.85 a barrel on the New York Mercantile Exchange, its lowest level since April of 2013. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 68 cents to close at $92.11 on the ICE Futures exchange in London.
Sliding oil prices are also hitting energy stocks, and th! e sector extended its losses on Tuesday. Energy companies in the S&P 500 have dropped 9.4 percent in the past month.
U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.34 percent from 2.42 percent on Monday. That's close to its lowest level of the year.
In metals trading, gold rose $5.10, or 0.4 percent, to $1,212.40 an ounce. Silver edged up 2 cents, or 0.1 percent, to $17.24 an ounce. Copper was little changed at $3.04 per pound.
On Wednesday, the U.S. Federal Reserve is due to release notes on its latest meeting on Wednesday. Investors will be looking for signs of when the Fed might raise interest rates. The first rate increase is not expected until mid-2015.
Among other stocks making big moves on Tuesday:
• Keurig Green Mountain (GMCR) jumped after analysts at Goldman Sachs initiated their coverage of the stock with a "buy" rating, predicting that the company's sales and earnings growth are poised to accele! rate. Keurig's stock jumped $6.50, or 4.9 percent, to $139.75.
�! � AGCO (AGCO), an agricultural equipment maker, cut its third-quarter and full-year earnings forecasts, sayings its results are expected to be hurt by weaker sales in all regions, lower production and the impact of shifting exchange rates. The company will report its earnings on Oct. 28. AGCO's stock dropped $4.97, or 10.6 percent, $42.13.
AP Business Writer Bernard Condon contributed to this report.
What to watch Wednesday:
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The Earth has 370,000 miles of coastline with some amazing spots to walk along the beach, listen to the waves crash and relax -- or even party. In the U.S., you can choose among hundreds of Atlantic coast towns: the quiet of Cape Cod; the wide expanses and soft white sand along the Jersey shore, the dunes in North Carolina, or the high energy of Miami Beach. On the West coast, there are the hipster cool California beaches of Newport and Venice Beach, and the serenity of Oregon's Cannon Beach, which holds a sand-castle contest every June. And if the thousands of beaches on the continent aren't enough, you can hop over and take surfing lesson on Waikiki Beach in Hawaii or go windsurfing in Maui.
1. Hit the Beach -
Providenciales in the Turks and Caicos won this year's Travelers' Choice award from TripAdvisor.com for its diving and snorkeling along the miles of accessible coral reefs. Other popular Caribbean destinations include the U.S. Virgin Islands, Barbados and the Cayman Islands. These are all year-round destinations, although many experts say the spring is the best time.
2. Island-hop -
Is there anything more romantic than a relaxing week, watching the sun set from your private hut in the French Polynesian island of Bora Bora? Been there? Done that? How about the honeymoon hotspots of Tahiti or Fiji or the 115 islands of the Seychelles in the Indian Ocean? Check out Australia's Dunk Island rainforest, or get to the Maldives while you still can. Some climate experts warn that it could be the first nation to disappear due to climate change.
3. Get exotic -
There are far more than seven natural wonders in our world, but that list is not a bad place to start. You can see the Grand Canyon, the Great Barrier Reef off the coast of Australia and Mount Everest. There's also the dramatic natural scenery along the Swiss Alps as well as 59 U.S. national parks, including the classic (Yosemite, Yellowstone), the most-visited (Great Smoky Mountains), the wet (the Everglades) to the dry (Death Valley, where the temperature once hit 134 degrees).
4. Count the natural wonders -
If you want everything taken care of for you, a cruise might be your ticket. It's a floating home with tons of food (of varying quality), entertainment and multiple destinations. It also may give you the most bang for the buck, with budget packages available as well as upscale voyages. You can cruise through the Caribbean, up to Alaska (in-season, of course), through the Mediterranean, through the fjords of Norway or down the rivers of Europe. A cruise can also offer something for you, your children and the grandkids, too. The biggest cruise companies are Carnival (CCL) (which also includes Princess and Holland American), Royal Caribbean (RCL), and Star Cruises (based in Malaysia).
5. Cruise it -
After endless meetings, computer time and paperwork, this is the time to get moving. The Grand Canyon is not only grand to look at but it offers some high-adrenaline hiking and white water rafting. Yosemite, Yellowstone and other national parks also offer top-notch hiking trails. Overseas, you can take a four-day, 30-mile trek along the Inca trail to Machu Picchu in Peru; explore the rugged beauty and wildlife of Australia's Outback, or cycle through the rolling hills and villages of France's Provence and Bordeaux regions. While these are active vacations, you don't have to all of the work yourself. Tour companies will make the (sometimes-luxurious) arrangements, and you don't have to rough it.
6. Don't rest -
This might be the ultimate getaway: book a seat on Richard Branson's Virgin Galactic flight into space. The first one is set to launch in the spring of 2015 from the company's Spaceport in New Mexico. Obviously, it's not for everyone. The cost for a seat is more than $400,000. If you want to keep your feet firmly planted on earth, revisit Darwin's trip to the Galapagos Islands or interact with the penguins in the Falkland Islands. Or learn the local culture by trekking through Thailand or Costa Rica.
7. Be adventurous -
You can take a safari through more than 100 countries in every continent, but safaris are most associated with Africa. The best times are usually January through March and June through December. A trip into the wild is a chance to get in harmony with nature, experience local cultures and traditions and maybe capture it with one-of-a-kind photos.
8. Get back to nature -
I'm not sure which is better: a Michelin-rated restaurant in Paris or a sidewalk cafe with fresh baguettes and pastries. (I do know which is more affordable.) Europe is full of foodie destinations, such as Rome or a tapas crawl in Barcelona. In Asia, you'll want to sample the wonderfully fresh sushi in Tokyo and food in Huangzhou or dozens of other Chinese cities.In the U.S., go coast-to-coast with lobster rolls in Maine, the famous restaurants and food trucks in New York, Chicago's burgers and pizza, Creole specialties in New Orleans and the coffee bars and fresh oysters in San Francisco. There are many local favorites. Travel+Leisure magazine names the pizza in Providence, Rhode Island (check out the movie "Mystic Pizza" for the Connecticut version); the cheesesteaks of Philadelphia; the small cafes in Savannah, Georgia; the Tex-Mex chili sauces in San Antonio; and the barbecue in Kansas City. When you've cons! umed everything there is to eat in the U.S., go north of the border to Montreal and Quebec for French cuisine.
9. Be a foodie -
Just because you're old enough to retire doesn't mean you too old to learn. In fact, this may be the best stage of life to expand your mind. Road Scholar is a nonprofit that offers 5,500 educational tours in all 50 states and 150 countries. Popular programs include Christmas in New York City and photography of the four corners region of Colorado, Utah, New Mexico and Arizona. In volunteer vacation, participants maintain trails in the U.S. Virgin Islands, work with orphaned or abandoned children in Peru or do other meaningful things with your time, brain and energy.
10. Learn and do well by doing good -
It's more than a Fleetwood Mac hit of the 1970s. The opportunities to travel are endless. You can go by yourself, as a couple, in small groups. You can go for a long weekend to Boston or settle in for a two-month stay at a villa in the hills of Italy. You can go on a limited budget (AARP offers travel discounts) or live in the lap of luxury. You'll meet new people. You can start to cross items off of your bucket list -- and add new ones to it.
11, Don't stop thinking about tomorrow - More from Drew Trachtenberg:
Source : http://www.dailyfinance.com/2014/10/07/market-wrap-us-stocks-slide-global-growth-concerns/
