Markets Hustle: Stocks Lower on China Outlook, McDonald's Forecast

Tickers in this article: IXIC ^DJI ^GSPC

NEW YORK (TheStreet) -- Markets opened lower Thursday, even after data suggested that the labor market was generally improving as investor sentiment appeared to sour on signs of a slowdown in China, the world's second-largest economy.

A mediocre global sales outlook report from McDonald's , a company often viewed as an economic bellwether, added to concerns that stocks lack a catalyst to move to higher levels.

  • The S&P 500 was 0.53% lower at 1,835.04 while the Dow Jones Industrial Average was losing 0.71% to 16,256.92. The Nasdaq was off 0.53% to 4,220.32.
  • Chinese manufacturing activity shrank in January for the first time in six months, according to the flash Markit/HSBC Purchasing Managers' Index. The preliminary report showed a decline to 49.6 from the final December figure of 50.5. "The credit crunch in the nation has compromised with growth objectives, triggering worldwide concerns," said Singapore-based Phillip Futures investment analyst Chee Tat in a note.
  • McDonald's stock was lower after posting fourth-quarter revenue and December same-store sales that came in a tad below estimates. The company expects January global comparable sales to be relatively flat. Quarterly earnings topped expectations by a penny.
  • Initial jobless claims for the week of January 18 rose 1,000 to an as expected 326,000. However, the four-week moving average fell by 3,750.
  • The January Markit "flash" PMI manufacturing index was 53.7 - both the consensus forecast and the final December reading (both 55). The decline was broad based, as the output, new orders and employment indices all moved lower. 
  • The November Federal Housing Finance Agency's housing price index showed house prices rose 0.1 percent in November from October, indicating the real estate recovery may be losing strength. Prices climbed 7.6 percent from a year earlier. Also today, data is expected to show existing home sales edged up to a seasonally adjusted annual pace of 4.94 million. 
  • The Hong Kong Hang Seng closed off 1.51% while the Shanghai Composite fell 0.47%. The DAX was falling 0.59% and the U.K. FTSE was 0.26% lower, all dragged down by the poor China data.

--- Written by Jane Searle in New York