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Asia stocks drop, tracking weak start to 2024 on Wall Street

Wall Street lower

Nikkei 225 dropped 1.2% to 33,048.58, Hang Seng lost 0.6% to 16,542.19, the Shanghai Composite index dipped 1% to 2,938.35, S&P/ASX 200 lost 0.4% to 7,493.00, and Kospi shed 0.8% to 2,585.77

Asian stocks slid on Thursday, tracking a weak start to 2024 on Wall Street as Japan’s markets reopened.

In Tokyo, the mournful mood was clear as the market began the year with a moment of silence instead of a celebratory New Year’s ring of the bell after a major earthquake left at least 77 people dead and dozens missing.

Japan’s benchmark Nikkei 225 dropped 1.2% to 33,048.58.

Hong Kong’s Hang Seng lost 0.6% to 16,542.19 and the Shanghai Composite index dipped 1% to 2,938.35.

Australia’s S&P/ASX 200 lost 0.4% to 7,493.00. South Korea’s Kospi shed 0.8% to 2,585.77.

Stocks dropped on Wall Street, as the slow start to the year there extended into a second day.

The S&P 500 declined 0.8% to 4,704.81, though it remains within 2% of its record set two years ago. The Dow Jones Industrial Average declined 0.8%, from its own record to 37,430.19. The Nasdaq composite led the market lower with a decline of 1.2%, to 14,592.21.

Some of last year’s biggest winners again gave back some of their gains to weigh on the market. Tesla dropped 4% after more than doubling last year, for instance. It and the other six “Magnificent 7” Big Tech stocks responsible for the majority of Wall Street’s returns last year have regressed some following their huge gains.

A couple of reports released Wednesday morning suggested the overall economy may be slowing from its strong growth last summer, which the Fed hopes will keep a lid on inflation. The risk is it might slow too much.

One report showed U.S. employers were advertising nearly 8.8 million job openings at the end of November, down marginally from the month before and the lowest number since early 2021. The report also showed slightly fewer workers quit their jobs during November.

The Federal Reserve is looking for exactly such a cooldown, which it hopes will limit upward pressure on inflation without a need for widespread layoffs.

These data will be welcome news for policymakers, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

A second report from the Institute for Supply Management showed the U.S. manufacturing industry is improving by a touch more than economists expected, but it is still contracting. Manufacturing has been one of the hardest-hit areas of the economy recently, while the job market and spending by U.S. households have remained strong.

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