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Disappointing economic data drives down stocks

August 16, 2011 |  7:45 am

Stocks retreated for the first time in four days after the release of disappointing reports about the Wall walkers getty images European and U.S. economies.

The Dow Jones industrial index was down in early trading 47 points, or 0.4%, to 11,436.05. The broader Standard & Poor's 500 index was down more sharply.

European stocks began the drop after government officials there announced that the European economy had grown only 0.2% from the first quarter to the second quarter, with the German economy growing at an even slower 0.1%. Both figures were lower than analysts had expected and were at their lowest levels since 2009.

Leading stock indexes were recently trading down 0.9% in Germany and France.

In the United States, Commerce Department statistics showed that the housing industry slowed in July, though less than expected.

Stocks recovered some of their earlier losses after the Federal Reserve announced that industrial production in the U.S. grew in July at its fastest pace of the year. This surprised some economists who had worried that the U.S. manufacturing sector, which has led the recent economic recovery, might be slowing down. 

"This is one of those reasons why we are not rushing to call a double dip," Steve Ricchiuto, the chief economist at Mizuho Securities, wrote to clients.

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-- Nathaniel Popper

Photo credit: Getty Images

 

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