Stocks Fall for 2nd Day; Dollar Slips With Bonds: Markets Wrap

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Vildana Hajric

27 Jul 2020, 04:13 AM IST

Stocks Fall for 2nd Day; Dollar Slips With Bonds: Markets Wrap

Wall street signage is seen near the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Jeenah Moon/Bloomberg)

(Bloomberg) -- U.S. stocks fell for a second day as investors grew anxious about rising tensions with China and a potential stalling of the economic recovery. Spot gold topped $1,900 an ounce for the first time since 2011.

The S&P 500 ended the week lower and the Nasdaq 100 notched its first back-to-back losses in 49 days. Intel Corp. plunged on a warning of a production delay. Rival chipmaker Advanced Micro Devices Inc. gained. Verizon Communications Inc. gained after topping sales estimates, somewhat offsetting Intel’s drag on the Dow Jones Industrial Average.

China ordered the U.S. to shut a consulate in a tit-for-tat retaliation, sending equities lower in Asia and Europe. The dollar extended this week’s slide to the weakest level since January, and the offshore yuan dipped. Core European bonds fell after U.S. Treasuries turned lower. Five-year Treasury yields touched an all-time low before bouncing back. Oil held above $41 a barrel in New York.

Beijing’s latest move further strains the increasingly fraught relationship with the U.S., which forced China to leave its mission in Houston earlier this week. The two superpowers have also recently clashed on trade and early handling of the coronavirus, raising fears of a protracted conflict.

“We won’t be surprised if there is some sell-off because investors are shifting focus back to this geo-political tension,” Janet Mui, an investment director at Brewin Dolphin, said on Bloomberg TV.

Also hitting sentiment was the first uptick in U.S. jobless claims since March on Thursday. A reading on the services sector Friday added to concern, though housing data was strong. While European manufacturing data for July showed a return to growth, firms cut jobs for a fifth straight month. Earnings beats keep rolling in, though they’re coming against low expectations.

These are the main moves in markets:

Stocks

The S&P 500 Index dipped 0.6% to 3,202.73 as of 4 p.m. New York time, the lowest in more than a week.

The Dow Jones Industrial Average decreased 0.7% to 26,469.55.

The Nasdaq Composite Index declined 0.9% to the lowest in almost three weeks.

The Stoxx Europe 600 Index declined 1.7% to 367.29, the lowest in more than a week on the biggest drop in four weeks.

Currencies

The Bloomberg Dollar Spot Index dipped 0.6% to 1,186.88, the lowest in more than six months.

The euro climbed 0.4% to $1.1643, reaching the strongest in about 22 months on its sixth consecutive advance.

The Japanese yen appreciated 0.8% to 105.97 per dollar, the strongest in almost 19 weeks on the largest increase in more than six weeks.

Bonds

The yield on 10-year Treasuries was edged up to 0.58%.

Germany’s 10-year yield advanced three basis points to -0.45%, the largest gain in more than a week.

Britain’s 10-year yield increased two basis points to 0.144%.

Commodities

West Texas Intermediate crude rose 0.3% to $41.21 a barrel.

Gold futures strengthened 0.5% to $1,899.6 an ounce, .

Copper dipped 1.7% to $2.89 a pound, the lowest in a week on the largest decrease in almost six weeks.