A dealer is reflected on a monitor displaying a graph of the movement of the yen against the U.S. dollar at a foreign exchange brokerage in Tokyo, Japan. (Photographer: Yuriko Nakao/Bloomberg)

Stocks Slide, Treasuries Climb as Concerns Mount: Markets Wrap

(Bloomberg) -- A risk-off tone gripped global financial markets, with U.S. stocks sliding while Treasuries climbed with the yen on demand for havens.

American equities fell the most since last week’s rout as investors fretted over the U.S.-China trade war’s impact on economic growth, the Italian debt crisis and rising interest rates. High-flying technology shares again led the sell-off, while defensive sectors like utilities and real estate fared better. Mixed earnings, with disappointments from key industrial and tech names, added to investor anxiety.

The S&P 500 slid back toward its 200-day moving average, the Dow Jones Industrial Average shed more than 300 points and the Nasdaq 100’s rout topped 2 percent.

The weakness comes after China sank overnight, bringing losses in its major benchmark to 30 percent since January highs. The dollar touched the highest in more than a week, while the 10-year Treasury yield fell to 3.17 percent. Italy’s yield spread over Germany’s hit the highest level since 2013 as European Union officials questioned the country’s budget plan.

Stocks Slide, Treasuries Climb as Concerns Mount: Markets Wrap

“Like every other spurt of volatility, it’s hard to give an exact reason, but we have all the usual culprits: concern about global trade, earnings season and companies potentially staring down the barrel of another tariff maybe over the winter,” said Kevin Caron, a senior portfolio manager at Washington Crossing Advisors. “It’s a hodgepodge. You have all these things that come together at the same time.”

Earnings remain in focus though the depth of the sell-off overshadowed most major reports. Weak results from Germany’s SAP and Taiwan Semiconductor dragged American tech indexes lower. Earnings misses from several U.S. industrial firms and a Bank of America downgrade of the housing sector fueled worries that higher interest rates and the trade war are hitting profits. Philip Morris surged on strong demand, buoying consumer shares.

Terminal readers can read more in our Markets Live blog.

Here are some key events for the rest of this week:

  • Third-quarter GDP for China comes Friday in addition to last month’s retail sales and factory output.

These are the main moves in markets:

Stocks

  • The S&P 500 Index declined 1.4 percent as of 4 p.m. New York time, the most since Oct. 11.
  • The Nasdaq Composite fell 2.1 percent, while the Nasdaq 100 dropped 2.2 percent, both the most since Oct. 10.
  • The Dow Jones Industrial Average slid 324 points to 25,382.50.
  • The Stoxx Europe 600 Index fell. 0.5 percent.
  • The MSCI Emerging Market Index sank 1.4 percent.
  • The MSCI Asia Pacific Index declined 0.7 percent.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.4 percent, hitting the highest since Oct. 9.
  • The euro fell 0.4 percent to $1.1456.
  • The British pound fell 0.7 percent to $1.3020.
  • The Japanese yen increased 0.4 percent to 112.17 per dollar.

Bonds

  • The yield on 10-year Treasuries fell three basis points to 3.17 percent.
  • Germany’s 10-year yield fell five basis points to 0.42 percent.
  • Britain’s 10-year yield fell four basis points to 1.54 percent.

Commodities

  • West Texas Intermediate crude decreased 1.5 percent to $68.71 a barrel.
  • Gold rose 0.1 percent to $1,228.00 an ounce.

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