New York – Data from September about the U.S. manufacturing sector showed no growth in comparison to August which was the weakest month in almost two years, according to an industry report on Wednesday.
Markit’s preliminary U.S. Manufacturing Purchasing Managers’ Index recorded an unchanged reading of 53 as manufacturers dealt with a stronger dollar and weaker global demand. A reading above 50 indicates expansion in the sector. Chris Williamson, chief economist at Markit, told Reuters a strong dollar, flagging demand in many export markets and reduced capital spending by energy and other companies were all dragging on U.S. manufacturing.
“The survey is indicating the weakest manufacturing growth for almost two years, meaning the sector will have acted as a drag on the economy in the third quarter,” Williamson said.
Also, stocks moved back to red by late afternoon on Wednesday after crude oil closed below $45 a barrel. Crude fell by 1.9 million barrels over the week that ended on September 18, doubling the estimated drop of 700,000.
The S&P 500 was down 0.23%, the Dow Jones Industrial Average fell 0.32%, and the NASDAQ slid 0.13%. The Volatility Index, commonly referred to as the ‘fear index,’ was down 3% to 21.76.
Asian markets ended deep in the red on Wednesday after fresh data on China’s factory sector underscored fears of a slowdown. Factory activity in China dropped to its lowest level since March 2009, a reading of 47 in September fell below estimates of 47.5, according to the preliminary Caixin China manufacturing PMI. China’s Shanghai Composite fell 2.2%.
Manufacturing activity in Europe also showed signs of weakness. A reading of 53.9 in September fell short of forecasts, according to the Markit Eurozone Manufacturing PMI. However, growth in new orders jumped to a five-month high, a positive sign of likely improvement in the overall manufacturing sector in coming months.