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US: Stocks tumble on global growth fears, Volkswagen


[NEW YORK] Wall Street stocks tumbled on Tuesday, joining European equities in falling on worries about global growth and the burgeoning Volkswagen emissions scandal.

The Dow Jones Industrial Average dropped 179.72 points (1.09 per cent) to 16,330.47.

The broad-based S&P 500 fell 24.23 (1.23 per cent) to 1,942.74, while the tech-rich Nasdaq Composite Index sank 72.23 (1.50 per cent) to 4,756.72.

Analysts cited rising worries about global growth following weaker Chinese economic data and dropping prices for copper and other key commodities.

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"I just think we're in this period where investors are worried about a slowdown," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

Analysts cited a report from the Asian Development Bank projecting lower growth in Asia after it cut its forecast for Chinese growth in 2015 to 6.8 per cent from the previous projection of 7.2 per cent.

US auto giants Ford and General Motors lost 2.8 per cent and 1.9 per cent, respectively, as shares of global automakers fell due to the Volkswagen scandal.

Tech stocks were generally weak with Apple losing 1.6 per cent, Facebook 2.7 per cent and Google 2.0 per cent.

Bank of America dipped 0.8 per cent as shareholders voted in favor of keeping chief executive Brian Moynihan as chairman, turning back an effort from critics who sought to strip Moynihan of the second post.

Dow member Goldman Sachs lost 2.0 per cent as chief executive Lloyd Blankfein disclosed he will be treated for lymphoma. Blankfein said he has a curable form of the blood cancer and that the prognosis is good.

Con-Agra Foods sank 7.1 per cent after the food giant warned earnings would be negatively impacted by the strong dollar and higher marketing costs.

General Mills rose 0.6 per cent after reporting that first-quarter net income jumped 23.6 per cent to US$426.6 million.

Bond prices rose. The yield on the 10-year US Treasury dipped to 2.14 per cent from 2.20 per cent Monday, while the 30-year dropped to 2.94 per cent from 3.02 per cent. Bond prices and yields move inversely.