Stocks Fall After Weak Chinese Data; Dollar Sinks Against Euro, Yen
May 03 2016 - 9:11AM
Dow Jones News
By Riva Gold
Concerns about the global economy weighed on stocks Tuesday,
while the dollar sank to multi-month lows against the euro and
yen.
The Dow Jones Industrial Average slid 139 points, or 0.8%, to
17752 shortly after the opening bell. The S&P 500 and the
Nasdaq Composite declined 0.7%.
The declines come after U.S. stocks posted their biggest one-day
advance in more than two weeks on Monday.
The Stoxx Europe 600 declined 1.4%, weighed by shares of mining
companies.
Copper and iron ore prices fell sharply after a private gauge of
Chinese manufacturing showed a dip in April, adding to concerns
over the health of the world's second-largest economy.
Meanwhile, the European Commission said Tuesday that growth in
the eurozone and the wider European Union will be slightly weaker
this year than previously forecast, citing the economic slowdown in
China as well as geopolitical tensions and uncertainty.
Mixed first-quarter earnings results also weighed on shares of
European banks. Shares in UBS fell 7.3% after the Swiss lender
reported a sharp fall in first-quarter profit, while Germany's
Commerzbank declined 8.9% after it missed consensus estimates and
reduced its profit outlook for the full year.
Shares in HSBC swung between small gains and losses after the
British bank's first-quarter results exceeded expectations, but
still reflected an 18% fall in first-quarter net profit.
In the U.S., Halliburton's quarterly loss widened, while results
from Pfizer and CVS Health came in above forecasts for the first
quarter. Halliburton dropped 2.5%, and Pfizer gained 2% and CVS
edged up slightly.
"The market was appropriately conservative going into the
quarter, but fortunately companies have been able to beat
estimates," said John Bailer, portfolio manager at the Boston
Company Asset Management. "What we need is earnings growth and
earnings surprises," he added.
In currencies, the dollar continued to weaken after data Monday
showed U.S. manufacturing activity was lackluster in April, adding
to a string of sluggish U.S. economic reports.
The euro was up 0.3% against the dollar at $1.1564, after a
seven-session climb sent the common currency to its highest level
against the dollar in eight months. Speculators have reduced their
net euro short positions for six consecutive weeks, while net
dollar long positions fell last week to their lowest since June
2014, according to strategists at Rabobank.
The yen also hit an 18-month high against the dollar. The dollar
was last down 0.5% against the yen at Yen105.8840.
The British pound hit its strongest level against the dollar
since January, but pulled back slightly after the U.K.
manufacturing purchasing managers index fell to its lowest level
since February 2013.
Earlier, shares in Hong Kong ended down 1.9%, weighed by the
weaker Chinese data. Shares in Shanghai, however, gained 1.9% as
the market reopened after a holiday, spurred by President Xi
Jinping's recently stated support for the "healthy development" of
the country's stock markets.
Australia's S&P ASX 200 gained 2.1% after its central bank
cut interest rates for the first time in a year. The Australian
dollar fell sharply after the rate cut, weakening almost 2% against
the dollar to as low as $0.7557.
Markets in Japan were closed for a holiday.
In commodities, Brent crude oil fell 0.6% to $45.54 a barrel,
while gold edged up 0.2% to $1,297.80 an ounce. Copper futures in
London declined 1.5% to $4,962 a ton.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
May 03, 2016 09:56 ET (13:56 GMT)
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