1-23-14 10:46 AM EST | Email Article
 

By Anora Mahmudova, MarketWatch

 

NEW YORK (MarketWatch) -- U.S. stock market opened sharply lower on Thursday, hit by weak Chinese economic data and mixed U.S.company earnings.

 

The S&P 500(SPX) fell 17.7 points, or 1%, to 1,827.08 shortly after the opening bell, breaking a two-day winning streak. The benchmark index is down 1.1% year-to-date.

 

The Dow Jones Industrial Average(DJI) dropped 169.3 points, or 1%, to 16,205.67 in early trade, falling for the third straight session.

 

The Nasdaq Composite(RIXF) shed 42 points, or 1% to 4,201.14, trimming gains it clocked in since the start of the year.

 

Follow the stock market live blog.

 

Investors appeared most worried about the surprise contraction in China's manufacturing sector, which could further muddy an already hazy picture for the global economy. China is the world's second-largest economy and has been gobbling up raw materials around the world to feed its factories.

 

Among the day's other economic data, an early gauge of U.S. manufacturing dipped in January from the prior month, but some of the slowdown was due to cold weather, Markit reported Thursday . The U.S. flash purchasing managers' index slipped to 53.7 in January, down from December's level of 55, which was an 11-month high. This is the slowest improvement in conditions since October.

 

U.S. initial jobless claims rose slightly to 326,000. "Today's jobless claims data had a worrying component -- continuing claims stayed above 3 million. Investors are concerned about the labor market and it is showing in today's selloffs" said Chris Gaffney, senior market strategist at EverBank.

 

In the housing sector, RealtyTrac announced U.S. residential-property sales jumped 10% in December from the prior year, while median sales prices also rose.

 

Sales of existing homes rose 1% in December to a 4.98 million annual rate, while the median sale price climbed 9.9% to $198,000.

 

McDonald's (MCD) reported nearly flat earnings in the fourth quarter, as sales edged down slightly while expenses rose. Earnings per share were $1.40, slightly ahead of consensus expectations. Chief Executive Don Thompson called 2013 "a challenging year". Shares in the fast-food chain rose 1% in early trading.

 

Shares in Netflix Inc. (NFLX) rallied 17.5% after the video streaming company reported better-than-expected earnings late on Wednesday.

 

Starbucks Corp. (SBUX) and Microsoft Corp. (MSFT) will report after the market closes.

 

More must-reads from MarketWatch:

 

Flat jobless claims imply steady labor market

 

Why the billionaires of Davos must tackle inequality

 

Live blog from Davos

-Anora Mahmudova; 415-439-6400; AskNewswires@dowjones.com

 

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(END) Dow Jones Newswires

01-23-14 1046ET

Copyright (c) 2014 Dow Jones & Company, Inc.
Copyright 2014 MarketWatch
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Morningstar - 2014/1/23 - U.S. stocks spooked by weak China data
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