Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

GLOBAL MARKETS-Stocks slide on commodities' tumble, dollar up

Published 23/09/2015, 01:19 am
© Reuters.  GLOBAL MARKETS-Stocks slide on commodities' tumble, dollar up
EUR/USD
-
USD/JPY
-
XAU/USD
-
US500
-
DJI
-
HG
-
LCO
-
IXIC
-
US10YT=X
-
FTEU3
-
DXY
-

(Adds North American trading, latest prices and quotes; changes byline and dateline; previous LONDON)

* Wall St losses near 2 percent

* European shares off sharply

* Dollar index near two-week high on rates outlook

By Michael Connor

NEW YORK, Sept 22 (Reuters) - Falling commodities prices and worries about China's economy pulled stocks sharply lower on Tuesday, while bond yields declined and the dollar rose to a near two-week high on bets U.S. officials will soon hike interest rates.

Wall Street losses neared 2 percent on selling driven by falls in oil and copper, which also helped knock down shares in Europe and left the pan-European FTSEurofirst 300 stocks index .FTEU3 off 3.2 percent.

Wall Street's Dow Jones industrial average .DJI fell 268.45 points, or 1.63 percent, to 16,241.74, the S&P 500 .SPX lost 32.76 points, or 1.67 percent, to 1,934.21 and the Nasdaq Composite .IXIC dropped 91.49 points, or 1.89 percent, to 4,737.46.

Copper prices CMCU3 were down 3.9 percent at two-week lows, while oil was off 2 percent. The Chinese government's efforts to stimulate growth by easing fiscal and monetary policy have failed to calm nerves in global markets.

"The market is fragile as it is," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "The volatility will continue until we get some clarity from the Fed and China."

The U.S. Federal Reserve last week kept rates near zero, citing turbulence in a tightly-linked global economy, including slowing growth in China. Atlanta Fed President Dennis Lockhart said on Monday a rate hike later this year was still possible.

The selloffs in stocks and commodities boosted U.S. Treasuries prices and other lower-risk government debt, such as German 10-year Bunds DE10YT=TV . Benchmark 10-year Treasuries notes US10YT=RR were up 18/32 in price, yielding 2.148 percent, down 7 basis points from Monday's close.

Weakness in stock markets also helped lift the yen against the dollar, though the divergence between the Fed on the one hand and the European Central Bank and Bank of Japan on the other helped push the dollar to its highest since Sept. 10 against a basket of currencies .DXY .

Though the Fed held policy steady last week, ECB officials have been stressing that monetary policy in the euro zone will remain loose for some time.

The euro EUR= was down 0.4 percent at $1.1140, having hit a high of $1.1459 on Friday. The dollar eased 0.5 percent to 119.96 yen JPY= per dollar but was still above Friday lows.

Oil prices fell as concern over global growth weakened the outlook for demand and traders took profits from Monday's 3 percent to 4 percent rise.

Brent crude, the global benchmark, was down $1.11 a barrel at $47.82 LCOc1 . ID:nL4N11S13J

Gold XAU= eased with stocks and commodities and also suffered from the speculation the Fed may still raise rates in 2015. It last traded at $1,123.10, a decline of 0.9 percent.

"We're still in a situation where investors are going to wait and see when a hike will happen," Capital Economics analyst Simona Gambarini said. "There's going to be a bit of volatility around precious metals until the Fed eventually does hike rates."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.