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Stocks plunge to 8-month lows on growth fears; J&J nosedives

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Stocks fall sharply on Wall Street, shaving 496 points off the Dow Jones Industrial Average, as traders worry about signs of weaker economic growth in China and Europe.
Stocks staggered to eight-month lows Friday after weak economic data from China and Europe set off more worries about the global economy. Mounting tensions in Europe over Britain’s impending departure from the European Union also darkened traders’ moods.
Major U. S. indexes fell about 2 percent and the Dow Jones Industrial Average dropped as much as 563 points. On the benchmark S&P 500 index, health care and technology companies absorbed the worst losses.
Johnson & Johnson plunged by the most in 16 years after Reuters reported that the company has known since the 1970s that its talc Baby Powder sometimes contained carcinogenic asbestos. The company denied the report.
China said industrial output and retail sales both slowed in November. That could be another sign that China’s trade dispute with the U. S. and tighter lending conditions are chilling its economy, which is the second-largest in the world. Meanwhile, purchasing managers in Europe signaled that economic growth was slipping.
Sameer Samana, senior global market strategist for Wells Fargo Investment Institute, said investors are concerned that weakness will make it way to the U. S. They’re wondering if the U. S. economy is likely to run out of steam sooner than they had thought.
« Market consensus has been that the next recession is probably in 2020 or beyond, » he said. Now, he said, the market is « really testing that assumption and trying to figure out whether it’s sooner. »
Rising interest rates and tighter credit conditions are adding to investors’ nervousness because they both tend to slow down economic growth. This week the European Central Bank said it is ending a bond-buying program that has pumped trillions into Europe’s economy. The Federal Reserve is expected to increase U. S. rates again on Wednesday, as it’s been doing for the last three years. It may also shed light on whether it plans to raise rates further in 2019.
For more than 20 years, China has been one of the biggest contributors to growth in the global economy, and when investors see signs the Chinese economy is weakening, they expect it will affect other countries like the U.

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