U.S. Stocks Fall Fifth Day as Treasuries Retreat: Markets Wrap

U.S. Stocks Fall Fifth Day as Treasuries Retreat: Markets Wrap

Ten-year yield climbs to 3.23% after declining on Tuesday. S&P 500 in longest slump since November 2016, dollar firm

U.S. stocks fell for a fifth day as Treasury yields resumed their upward march and investors grew increasingly concerned about the effects of the trade war with China. Oil held near $75 a barrel as a major hurricane headed for the Florida Panhandle.

The S&P 500 headed for its longest slide since Donald Trump’s election win on rising concern that higher yields will crimp corporate earnings. Fastenal Co. added to angst over thinner profit margins. Chipmakers sank while Estee Lauder and Tiffany fell the most in the index after French luxury goods maker LVMH confirmed China is enforcing customs rules more strictly. The Cboe Volatility Index touched the highest since July. The 10-year bond climbed to 2.23 percent.

Caution remains the key word across global markets as investors try to gauge whether the recent selloff has room to run. Valuations look more appealing, but the backdrop to trading is still dominated by deepening U.S.-China tensions and a surge in volatility for stock and bond markets. While the Treasury rout has eased, a glut of new U.S. debt is coming to the market this week. Following the American producer price data are consumer figures, which land on Thursday and may determine where yields go from here.

In Europe, the Stoxx 600 Index dropped as declines for industries including miners and automakers outweighed gains in telecom companies and banks. Shares in Japan rose after four days of losses while those in China edged up, and South Korean equities slumped as trading resumed after a holiday.

Elsewhere, Italian bonds erased a slump as the deputy premier predicted yields on the debt won’t blow out too far because of the government’s budget plans. The South African rand slipped following Tuesday’s rally. American crude traded near $75 a barrel as Hurricane Michael curtailed offshore oil production and the IEA issued a warning to the global market.

Terminal users can read more in our Markets Live blog.

Here are some key events coming up:

 

  • The U.S. Treasury has $230 billion worth of debt auctions this week.
  • The IMF and World Bank will hold meetings in Bali from Friday, where finance chiefs from around the world will gather.
  • A closely watched gauge of U.S. consumer prices probably remained elevated in September and rose 2.3 percent from a year earlier, according to forecasts ahead of Thursday’s release.
  • JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. kick off earnings season for U.S. banks on Friday.

 

These are the main moves in markets:

Stocks

  • The S&P 500 Index declined 0.7 percent as of 9:50 a.m. New York time. The five-day slump is the longest since November 2016.
  • The Stoxx 600 sank 0.7 percent to the lowest in about six months.
  • The U.K.’s FTSE 100 Index dipped 0.2 percent to the lowest in about six months.
  • Germany’s DAX Index declined 0.8 percent to the lowest in more than six months.
  • The MSCI Asia Pacific Index fell less than 0.05 percent.
  • The MSCI Emerging Market Index decreased 0.1 percent, reaching the lowest in about 17 months on its fifth straight decline.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.1 percent, the largest advance in a week.
  • The euro fell less than 0.05 percent to $1.149.
  • The British pound climbed less than 0.05 percent to $1.3147.
  • The Japanese yen declined 0.2 percent to 113.22 per dollar, the first retreat in a week.

Bonds

  • The yield on 10-year Treasuries jumped two basis points to 3.23 percent.
  • Germany’s 10-year yield increased one basis point to 0.56 percent.
  • Britain’s 10-year yield climbed one basis point to 1.725 percent, the highest in almost three years.
  • The spread of Italy’s 10-year bonds over Germany’s rose one basis point to 2.9342 percentage points.

Commodities

  • West Texas Intermediate crude decreased 0.2 percent to $74.83 a barrel.
  • Gold decreased 0.3 percent to $1,186.01 an ounce, the weakest in almost two weeks.

 

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