NEW YORK (Reuters) – Weak financial information within the United States and Europe weighed on international inventory benchmarks on Tuesday, sending traders into safe-haven belongings.
FILE PHOTO: Traders work on the ground on the New York Stock Exchange (NYSE) in New York, U.S., September 23, 2019. REUTERS/Brendan McDermid
European shares fizzled after euro zone manufacturing information confirmed the sharpest contraction in nearly seven years. U.S. shares and the greenback dropped sharply on information displaying manufacturing contracted to a 10-year low in September, including to fears of a slowdown on the planet’s largest economic system because of this of the commerce struggle with China.
“The PMIs across the globe have continued to deteriorate and obviously we are in line with that deterioration. It’s all due to the trade war,” mentioned Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
On Wall Street, the Dow Jones Industrial Average .DJI fell 244.36 factors, or 0.91%, to 26,672.47, the S&P 500 .SPX misplaced 23.68 factors, or 0.80%, to 2,953.06 and the Nasdaq Composite .IXIC dropped 48.13 factors, or 0.6%, to 7,951.21. Each index had posted modest positive aspects in earlier buying and selling.
MSCI’s gauge of shares throughout the globe .MIWD00000PUS shed 0.58%.
A slowdown in U.S. financial development at a time when Europe is seen as near falling right into a recession would take away one of the few vibrant spots amongst international markets.
“If we look at some of the data out of either Asia Pacific or the European zone, the U.S. economic data has certainly been the stand-out across the board,” mentioned Art Hogan, chief market strategist at National Securities in New York.
U.S. shares initially gained after White House commerce adviser Peter Navarro dismissed reviews on Monday that President Donald Trump’s administration was contemplating delisting Chinese corporations from U.S. inventory exchanges as “fake news.”
China and the United States are to renew commerce talks subsequent week in Washington.
“Whether it was a ‘fake news’ or not, it is becoming harder to know exactly what the U.S. administration will be doing,” mentioned Takashi Hiroki, chief strategist at Monex Securities.
Concerns over the economic system helped ship traders into the perceived security of bonds. Benchmark 10-year notes US10YT=RR final rose 9/32 in value to yield 1.6421%, from 1.673% late on Monday.
British authorities bonds had offered off as Prime Minister Boris Johnson pitched new proposals for an amended Brexit settlement that might take away the contested insurance coverage coverage for the Irish border.
“We had reached extreme lows (for bond yields) in August, but now the central banks have delivered the easing markets were expecting, I think we needed this correction,” mentioned Pooja Kumra, a European charges strategist at TD Securities.
The World Trade Organization reduce its forecast for development in international commerce this yr by greater than half on Tuesday and mentioned additional rounds of tariffs and retaliation, a slowing economic system and a disorderly Brexit may squeeze it much more.
Oil costs slipped after the weak U.S. information was launched, with U.S. crude CLcv1 down 0.7% to $58.84 a barrel and Brent LCOc1 down 1.1% to $53.47.
Reporting by David Randall; Editing by Dan Grebler and Nick Zieminski