US stocks plunge to 8-month lows on growth fears

US stocks closed at their lowest level since April. Photo / AP

US stocks closed at their lowest level since April, with Treasuries rising alongside the yen, as mounting concern over the health of the global economy overshadowed positive trade developments and signs of strength from the American consumer.

The S&P 500 index tumbled 1.9 per cent Friday (US time), after testing February lows, erasing the week's gains. Health-care and technology stocks were among the biggest decliners.

The Dow Jones Industrial Average sank almost 500 points, led by Johnson & Johnson's biggest rout in years amid mounting legal peril. Retailers retreated even after monthly data indicated US consumers are still spending. Oil and gold fell.

The sour mood on Wall Street came after equities slumped from Asia to Europe on concern that Chinese growth is slowing.

President Donald Trump attributed the latest data to his trade war, even suggesting a deal could come soon.

Investors took little solace in that, and earlier signs that trade tension was easing didn't do much to calm nerves.

"People see the challenges into 2019, and it's the same litany of fundamental challenges with revenue growth, global growth, all of these questions," said Yousef Abbasi, director of US institutional equities and global market strategist at INTL FCStone.

"They want to see something positive, but at the same time, they're hesitant to react when it's a small positive. It almost seems like they want the whole kit and caboodle."

Lackluster data also sent the euro down, as France's "Yellow Vests" movement exacerbated a decline in the region's PMI data to the lowest in more than four years.

The pound slid after European leaders rebuffed Prime Minister Theresa May's pleas to help her sell her Brexit agreement to a skeptical British parliament.

Growth concerns came back into focus midweek after European Central Bank President Mario Draghi said economic risks were moving to the downside, while in China retail sales and industrial production figures for November fell significantly short of estimates. The weak readings from Europe on car sales and manufacturing simply added to the gloom.