U.S. Stocks Open Mixed After Volatile Week
October 15 2018 - 9:18AM
Dow Jones News
By Avantika Chilkoti
Global stocks drifted mainly lower on Monday, resuming last
week's slump on concerns around global trade tensions and fresh
uncertainty over a Brexit deal.
The Dow Jones Industrial Average was up 0.1% in early trading,
while the S&P 500 and the Nasdaq Composite fell 0.1% and 0.4%,
respectively. The U.S. earnings season is getting into full swing
and investors will be watching retail sales data due later
Monday.
The Stoxx Europe 600 was flat, while in Asia, Japan's Nikkei
Stock Average dropped 1.9% while Hong Kong's Hang Seng was down
1.4%.
Last week, several global equity indexes recorded their worst
performances since February's rout as a steep spike in bond yields
sparked a selloff in stocks. Investors grew increasingly jittery
over U.S. growth and the prospect of further tightening from the
Federal Reserve.
Though markets seemed to find their footing Friday, the downbeat
trading continued Monday.
"I'm starting to seriously worry that markets may trigger an
economic downturn earlier than widely expected, driving a
self-fulfilling market adjustment toward more normal (long-term)
valuations," said Erik F. Nielsen, group chief economist at
UniCredit Bank, in a note to clients. "There is little chance
global policy makers will come to the rescue in time."
The recent selloff is about the tech sector rather than the
broader U.S. economy, according to Daniel Morris, senior investment
strategist at BNP Paribas Asset Management. Amid concerns around
the Federal Reserve's plans to tighten monetary policy, markets
tanked last week as new U.S. inflation data came in softer than
expected.
"It's really not interest rates -- it's just because tech is so
far up that it was due," Mr. Morris said. "There is no real
fundamental reason in terms of the economy."
In Europe, the more cautious tone was driven by uncertainty
around a Brexit deal. The negotiations around the U.K.'s impending
departure from the European Union suffered a fresh setback Sunday,
with the two sides failing to find a compromise on the issue of the
Irish border.
"A no-deal Brexit is likely to further curb growth expectations
and therefore the attractiveness of the U.K.," said Louise Dudley,
Global Equities Portfolio Manager, at Hermes Investment Management.
"Broadly our expectation is that we are likely to see higher costs
for businesses."
The British pound was down 0.1% against the dollar and 0.2%
against the Euro.
Germany's benchmark DAX index was up 0.53%, bucking the wider
trend, even after allies of Angela Merkel took a beating in
Bavaria's regional election this weekend.
Meanwhile, the U.S. earnings season was getting into full swing
and investors were training their eyes on retail sales data due
Monday.
The 10-year U.S. Treasury yield ticked up slightly to 3.158%,
compared with 3.140% Friday. Yields move inversely to prices.
The WSJ Dollar Index, which tracks the dollar against a basket
of 16 currencies, was down 0.3%.
In commodities, gold was up 1%. Brent crude, the global oil
price benchmark, was up 0.8% as tensions between the U.S. and Saudi
Arabia mounted over the suspected killing of a dissident Saudi
journalist in Istanbul.
(END) Dow Jones Newswires
October 15, 2018 10:03 ET (14:03 GMT)
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