AP Business Writer
U.S. stocks are falling sharply, following a global rout as investors pull money out of emerging markets like Turkey and Argentina and worry about a slowdown in China. Traders seeking safety shifted money into lower-risk assets like U.S. government debt and the Japanese yen. Small-company stocks fell more than the rest of the market as traders dumped assets seen as being risky.
KEEPING SCORE: The Dow Jones industrial average fell 180 points, or 1.1 percent, to 16,016 as of noon Eastern time Friday. The Standard & Poor's 500 index fell 23 points, or 1.3 percent, to 1,804. The Nasdaq composite was down 65 points, or 1.5 percent, at 4,153.
FLIGHT FROM RISK: Investors were worried about sharp drops in the values of currencies in several emerging markets including Turkey, Russia, South Africa and Argentina. The downturn began Thursday following signs that manufacturing was contracting in China, a major importer of raw materials and a key driver of global economic growth.
"All of that is making the market very sensitive and very vulnerable to growth expectations in emerging markets," said with Anastasia Amoroso, global market strategist at J.P. Morgan Funds.
SMALL CAPS HIT HARD: In another sign that investors are avoiding risk, stocks of smaller companies had even larger declines than broader U.S. market. The Russell 2000 index of small-company stocks fell 2.2 percent, twice as much as the Dow.
BIGGEST LOSERS: Railroad operator Kansas City Southern plunged $16.60, or 14 percent, to $100.75 after its earnings fell short of what analysts were looking for. Tool seller W.W. Grainger Inc. dropped $9.31, or 4 percent, to $247.70 after reporting income that also disappointed investors. Engine-maker Cummins Inc. fell $5.06, or 4 percent, to $127.
LOUSY WEEK: The Dow has fallen every day this week, leaving it down 2.7 percent. The S&P 500 had small gains Monday and Tuesday but is still down 1.9 percent since last Friday.
FEW WINNERS: The declines in the U.S. were broad. Declining stocks outnumbered rising ones 8-to-1 on the New York Stock Exchange. Eight out of 10 industry groups in the S&P 500 fell. Utilities, telecommunication services and consumer staples stocks posted tiny gains. That's another sign that investors were taking defensive positions: Traders tend to buy those stocks when they want relatively stable, lower-risk stocks that pay high dividends.
MICROSOFT GAINS: The software maker was one of the bright spots. Microsoft rose 63 cents, or 1.8 per cent, to $36.69. Its quarterly revenue and earnings beat Wall Street expectations because of strong sales of its new Xbox One console and Surface tablets.
JAVA JOLT: Starbucks rose $2.30, or 3 percent, to $75.69, after its quarterly earnings benefited from lower coffee costs and growing sales around the world.
EUROPE AND ASIA: The worries about emerging markets also sent overseas markets lower. Japan's yen surged, which hurts the prospects for Japan's export-driven economy. The Nikkei 225 fell 1.9 percent. France's CAC-40 index fell 2.8percent and Germany's DAX lost 2.5 percent.
TREASURIES AND COMMODITIES: Bond prices rose as investors moved money into lower-risk assets. The yield on the 10-year Treasury note declined to 2.73 percent from 2.78 percent late Thursday. Oil fell 73 cents to $96.58 a barrel. Gold was unchanged at $1,262 an ounce.
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.