Wall of worry weighs on markets, particularly in Europe
US stocks open lower; energy sector sinks along with oil
(about 1 hour later)
LONDON — Worries over the global economy weighed heavily on stock markets Monday, with Europe bearing the brunt of the selling. And oil prices fell further, with the benchmark New York rate below $30 a barrel again.
Stocks are opening broadly lower on Wall Street, putting the market on track for its second sizable loss in a row.
Investors are worrying about a number of issues, including the fall in the price of oil to multi-year lows, the scale of the slowdown in China and whether many parts of the global economy will fall back into recession and suffer a debilitating period of deflation, or falling prices. Last week, U.S. investment bank Citi warned in a note titled “Oilmageddon” of a “death spiral” gripping the global economy.
Energy stocks were among the biggest decliners in early trading Monday as the price of crude oil fell again.
On a day when there’s little economic data to drive trading, those fears have been dominant.
Property and casualty insurance company Loews sank 4 percent after reporting earnings that fell far short of analysts’ forecasts.
ANALYST TAKE: “Sentiment continues to remain downbeat because of growing concerns about the global economy, which is not looking healthy at all at the moment with growth in China slowing down and the U.S. struggling,” said Fawad Razaqzada, an analyst at Forex.com. “In addition, oil prices have been unable to further extend their recent gains and are now down for the third consecutive session.”
The Dow Jones industrial average fell 213 points, or 1.3 percent, to 15,989 as of 9:35 a.m. Eastern time.
KEEPING SCORE: In Europe, the Stoxx 50 index of leading European shares was down 2 percent at 2,693, having earlier fallen to its lowest level in nearly two and a half years of 2,683.70. Among Europe’s main indexes, France’s CAC 40 dropped 2.4 percent to 4,100 while Germany’s DAX fell. The FTSE 100 index of leading British shares was 1.9 percent lower at 5,735. Wall Street was headed for a lower opening too, with Dow futures and the broader S&P 500 futures down 1.4 percent.
The Standard & Poor’s 500 index lost 25 points, or 1.3 percent, to 1,854. The Nasdaq composite dropped 81 points, or 1.9 percent, to 4,279.
BANKS BEAR BRUNT: Bank stocks across Europe have been at the forefront of the sell-off as they’ll be among the most exposed to any sizeable economic downturn. Among the notable fallers were Germany’s Deutsche Bank, which was down 4.6 percent, and France’s BNP Paribas, which fell 4.4 percent.
Bond prices rose. The yield on the 10-year Treasury note fell to 1.79 percent.
ENERGY: Oil prices were falling again, with benchmark U.S. crude down $1.04 at $29.85 a barrel. Brent crude, a benchmark for international oils, was 83 cents lower at $33.23 a barrel in London.
ASIA’S DAY: Trading in Asia was a little bit more benign as many markets were closed for the Lunar New Year holidays. Japan’s benchmark Nikkei 225 rose 1.1 percent to 17,004.30 while Australia’s S&P/ASX 200 was flat at 4,975.40.
CURRENCIES: In risk-averse conditions, the dollar often garners support. The euro was down 0.3 percent at $1.1123 while the dollar fell 0.5 percent to 116.28 yen.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
