US stocks drop on economy worries

May 17th, 2011 - 5:47 am ICT by IANS  

New York, May 17 (IANS) US stocks fell Monday, with the tech-heavy Nasdaq leading the decliners, as weaker-than-expected economic data made investors worry about the strength of the US economy, Xinhua reported.

Before the opening bell, the Federal Reserve Bank of New York reported that manufacturing in the New York region slowed down in May as the cost of raw materials soared.

The Empire State index fell to 11.88, well below the economists’ estimates of 20. In April the index hit the record high of 21.70.

Meanwhile, US economic growth is expected to be slower than previously thought due to rising commodity prices, a tepid housing market and financial headwinds, according to a survey released by the National Association for Business Economics Monday.

A panel of 41 economists cut its projections for 2011 US economic growth from 3.3 percent to 2.8 percent, but maintained its forecast for moderate economic growth through 2012.

The Dow Jones industrial average fell 47.38 points, or 0.38 percent, to 12,548.37. The Standard & Poor’s 500 dropped 8.30 points, or 0.62 percent, to 1,329.47. The Nasdaq Composite Index declined 46.16 points, or 1.63 percent, to 2,782.31.

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