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U.S. stocks opened lower in the first session of the year as weak data in Asia and Europe confirmed fears of a global economic slowdown while the U.S. government shutdown dragged on.

Shortly after the open, the Dow Jones Industrial Average fell 356.52 points, or 1.53 per cent, at the open to 22970.94.

The S&P 500 opened lower by 31.59 points, or 1.25 per cent, at 2,475.43. The Nasdaq Composite dropped 95.57 points, or 1.93 per cent, to 6,539.76.

Canada’s main stock index opened lower on Wednesday, dragged down by shares of energy companies as oil prices were pressured by rising production.

The Toronto Stock Exchange’s S&P/TSX composite index was down 174.74 points, or 1.22 per cent, at 14,148.12.

It was led lower by consumer discretionary stocks, down 2 per cent, energy stocks, off 1.7 per cent, and industrials, off 1.3 per cent. Canadian Natural Resources was off 2.2 per cent, Brookfield Asset fell 2 per cent and Great-West Lifeco declined 1.5 per cent.

Among gainers, Bausch Health Companies Inc rose 5.3 per cent after brokerage Piper Jaffray upgraded the stock to “overweight” from “neutral.”

Maxar Technologies Ltd fell 5.1 per cent, the most on the TSX. This was followed by Norbord Inc’s 6.1 per cent plunge after Bank of America Merrill Lynch lowered its price target on the stock.

The most heavily traded shares by volume were Cannabis producers Aurora Cannabis, up 1.5 per cent, and Aphria Inc., up 0.76 per cent.

U.S. stocks are coming off their worst year in a decade, as weak data in Asia and Europe confirmed fears of a global economic slowdown while the U.S. government shutdown dragged on.

China’s factory activity contracted for the first time in 19 months in December, hit by the Sino-U.S. trade war, the private Caixin/Markit PMI survey showed, with the weakness spilling over to other Asian economies.

While Euro zone manufacturing activity barely avoided contraction, a drop for the fifth month took the reading to its lowest since February 2016.

The grim readings come ahead of the closely watched U.S. manufacturing survey on Thursday, payrolls data on Friday and the U.S. earnings season later this month, which is expected to show corporate profit shrunk in the October-December quarter.

The high-growth FAANGs — Facebook Inc, Apple Inc , Inc, Netflix Inc and Alphabet Inc — were all down anywhere from 0.2 per cent to 3.5 per cent

Shares of chipmakers, which get a sizeable portion of revenue from China, also dropped, with Intel Corp, Micron Technology Inc and Nvidia Corp down 0.5 per cent to 1 per cent.

“Investors are clearly concerned about the growth in 2019 and the lack of confidence is keeping them on the sidelines or they are feeling safer by parking their capital in risk-off assets,” said Naeem Aslam, chief market analyst at Think Markets UK Ltd in London.

A low appetite for risk sparked demand for U.S. Treasuries, sending yields on 10-year debt to a 12-month low of 2.6470 percent. The spread between two- and 10-year yields recently shrunk to the smallest since 2007, a flattening that has been a portent of recessions in the past.

Last year, the Dow, S&P 500 and Nasdaq recorded their biggest one-year percentage declines since 2008, and many of the concerns, mainly to do with a slowing economy, have carried over into this year.

One of them has been the trade dispute between the United States and China. Investors are keenly tuned into updates on the ongoing talks as a March 1 tariff-ceasefire deadline nears.

While U.S. President Donald Trump said last weekend that talks were progressing well, many analysts doubt the two countries can bridge their differences and reach a comprehensive trade deal in so short a negotiating window.

Meanwhile, the U.S. Congress is set to reconvene with no signs of a workable plan to end a 12-day-old partial shutdown and Trump not budging on his demand for $5 billion to fund a border wall. A Democrat plan to approve a two-part spending package does not include these funds.

While the shutdown is expected to have little effect on economic or corporate activity, the longer it lasts, the more it will weigh on an already weak investor sentiment.

With files from Reuters

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