Stocks End Eight-Day Rally as Growth Woes Persist: Markets Wrap

(Bloomberg) --

U.S. stocks ended the longest winning streak in 18 months Tuesday amid renewed concerns about slowing global growth and an escalation of trade tensions. Treasuries advanced.

The S&P 500 fell for the first time in nine sessions as the Trump administration threatened tariffs on the European Union and the International Monetary Fund cut its global growth outlook to the lowest since the financial crisis. Multinationals bore the brunt of the selling, with Caterpillar and Boeing dragging the Dow Jones Industrial Average lower. Airlines tumbled along with materials and energy producers.

Ten-year Treasury yields fell below 2.50 percent, while the greenback was mixed against major currencies. The pound dropped as the EU looked set to force the U.K to delay Brexit for as long as a year.

“Equity markets have been up for a really long time,” Josh Kutin, head of asset allocation for North America at Columbia Threadneedle Investments, said in an interview at Bloomberg’s New York headquarters. “It seems that there is just more and more data coming in which is suggesting the economy is slowing down -- not in a recession, but slowing down,” he said, adding the IMF’s outlook cut is “sort of endemic of what’s going on right now.”

Investors remain on edge as the IMF’s latest report on global growth helped renew fears about a slowing world economy just as the U.S. and the EU appeared to open another front in their trade war, all while negotiations with China remain unsettled. Federal Reserve minutes, American inflation data and a European Central Bank decision later this week could add to anxieties or help provide calm.

Elsewhere, Saudi Aramco, the world’s largest oil company, received more than $100 billion in orders for its debut bond sale, kick-starting an offering with yields likely to fall in line with or below Saudi Arabia’s sovereign debt. Israel’s stocks climbed with the shekel as the country went to the polls. Emerging-market currencies and shares advanced. Crude held near a five-month high.

Here are some notable events coming up:

• U.S. banks begin reporting first-quarter earnings, led by JPMorgan and Wells Fargo.
• The annual Spring Meetings of the World Bank Group and the IMF begin in Washington Tuesday.
• The Federal Reserve release minutes of its March meeting Wednesday.
• The ECB will probably leave its key interest rates unchanged Wednesday. Investors will be looking for further details on TLTRO.

These are the main moves in markets:

Stocks

• The S&P 500 Index fell 0.6 percent to 2,878.24 as of 4 p.m. New York time, the most since March 22.
• The Dow Jones Industrial Average fell 0.7 percent.
• The Stoxx Europe 600 Index decreased 0.5 percent.
• The MSCI Asia Pacific Index gained 0.4 percent.
• The MSCI Emerging Market Index rose 0.4 percent.

Currencies

• The Bloomberg Dollar Spot Index was little changed.
• The euro was steady at $1.1263.
• The Japanese yen increased 0.3 percent to 111.12 per dollar.
• The British pound fell 0.1 percent to $1.3054.
• The MSCI Emerging Markets Currency Index advanced 0.2 percent.

Bonds

• The yield on 10-year Treasuries sank two basis points to 2.49 percent.
• Germany’s 10-year yield declined two basis points to -0.01 percent.
• Britain’s 10-year yield dipped two basis points to 1.099 percent.

Commodities

• The Bloomberg Commodity Index fell 0.2 percent.
• West Texas crude fell 0.5 percent to $64.05 a barrel.
• Gold gained 0.5 percent to $1,308.10 an ounce.

--With assistance from Javier Blas, Eddie van der Walt and Vildana Hajric.

To contact the reporters on this story: Randall Jensen in New York at rjensen18@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Yakob Peterseil

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