Global Stocks: U.S. stock indices dropped

U.S. stock indices posted sharp declines on Monday amid a global stock selloff, which was triggered by tensions between Saudi Arabia and Iran. Recent weak data on China's economy contributed to these declines.

The Dow Jones Industrial Average fell 276.09 points, or 1.6%, to 17,148.94. The S&P 500 lost 31.28 points, or 1.5%, to 2,012.66 (all of its 10 sectors declined). The Nasdaq Composite dropped 104.32 points, or 2.1%, to 4,903.09.

A report from the Institute for Supply Management showed that activity in the U.S. manufacturing sector declined slightly in December. The corresponding index came in at 48.2 points compared to 48.6 points in the previous month.

Meanwhile construction spending unexpectedly declined in November offsetting a gain in the previous month. According to data by the U.S. Commerce Department, construction spending fell by 0.4% in November on a seasonally adjusted basis. Spending was expected to have grown by 0.5% after a 0.3% gain in October (revised from +1.0%). Construction spending rose by 10.5% on a y/y basis.

This morning in Asia Hong Kong Hang Seng fell 0.29%, or 62.59, to 21,264.53. China Shanghai Composite Index stabilized 0.00% with a margin 0.15 gain at 3,296.40. The Nikkei edged up 0.08%, or 14.25, to 18,465.23.

Asian stock indices traded mixed a day after Chinese stocks tumbled 7% amid disappointing economic data. Investors are concerned about China's economic growth and tensions in the Middle East. Japanese stocks climbed after China's markets stabilized.