Yesterday’s sharp gains put a bounce in investors’ steps, but today the markets aren’t going for a repeat. The Dow Jones Industrial Average has sunk 72 points, or 0.47%, as of 2:15 p.m. EDT, and Verizon Communications Inc. (NYSE:VZ)‘s stock is the anchor around its neck, along with downbeat global growth forecasts. Most members of the index are down today, with Verizon and several other big movers falling by more than 2%. Let’s catch up on the top stories you need to know.
China slows further
The International Monetary Fund cut its Chinese growth projections for 2013 and 2014 today, now expecting the world’s second-largest economy to grow by 7.75% per year after earlier projecting 8% growth this year and 8.2% next year. China’s slowdown from its previous double-digit-percentage economic growth has hurt companies counting on the developing economy to fuel sales. Industrials in particular have been hit hard: Major China manufacturing player Caterpillar Inc. (NYSE:CAT) saw its Asia-Pacific retail sales fall at least 20% in each of the last three months as reduced Chinese infrastructure spending hurts demand. Caterpillar’s stock hasn’t reacted badly to the news, however, with shares gaining 0.5% so far today to defy the Dow’s drop.
The biggest mover today isn’t threatened by a slower-growing China, however. Verizon Communications Inc. (NYSE:VZ)’s shares have dived 2.3% so far to rank dead last on the Dow, despite positive reports that Samsung’s Galaxy S4 phone will support the carrier’s new, faster-speed LTE system when Verizon upgrades its network. Verizon’s update could more than double Internet speeds, according to a report from Bloomberg, although the majority of existing Verizon Communications Inc. (NYSE:VZ) phones won’t immediately support the upgrade.
Still, Verizon Communications Inc. (NYSE:VZ)’s update to its LTE network is another move to keep the company one step ahead of its closest competitor in the American wireless industry, AT&T Inc. (NYSE:T). AT&T’s shares haven’t reacted much to the news today, falling just 0.4%, but this company is losing ground against Verizon in the fight for customers. AT&T certainly didn’t narrow the gap between itself and its biggest competitor, adding fewer than 300,000 new contract customers in 2013’s first quarter — less than half of Verizon’s 677,000 new customers. And Verizon Communications Inc. (NYSE:VZ)’s LTE update will only make customers less likely to switch to AT&T unless Ma Bell can keep up.