Stocks retreat after grim China data, oil plummets
Reuters
Published Feb 01, 2016 11:23AM ET
Stocks retreat after grim China data, oil plummets
By David Gaffen
NEW YORK (Reuters) - Global markets got February off to a cautious start on Monday following a rocky January, with stocks and oil falling in the wake of weak manufacturing reports around the world.
U.S. and European stocks fell, after disappointing euro zone manufacturing data dovetailed with the fastest contraction in China's giant factory sector in over three years, and U.S. manufacturing sentiment remained weak.
Those surveys showed the new year began much as the old one ended, with too much capacity chasing too little demand. Economists were expecting a similar picture from the United States.
"My main question is will the U.S. economy be able to continue to grow just through the services sector when the manufacturing sector is having such a tough time?" asked Rabobank U.S.-focused economist Philip Marey.
The Dow Jones industrial average (DJI) fell 58.9 points, or 0.36 percent, to 16,407.4, the S&P 500 (SPX) lost 7.6 points, or 0.39 percent, to 1,932.64 and the Nasdaq Composite (IXIC) dropped 10.26 points, or 0.22 percent, to 4,603.69.
Oil prices, the other major factor influencing markets this year, also fell. U.S. crude (CLc1) was down nearly 5 percent to $31.96, resuming a downtrend that had been interrupted of late on hopes for production cuts. Brent (LCOc1) dipped as well, falling 3.7 percent to $34.65 a barrel.
Still, Brent was up from Friday and more than 30 percent higher than its 12-year low of almost $27 less than two weeks ago.
It was under pressure Monday as a senior OPEC source told a Saudi Arabian newspaper it was too early to talk about an emergency meeting of the Organization of the Petroleum Exporting Countries (OPEC) to stem the persisting drop in prices amid a world glut.
Crude jumped last week after Russian energy officials said Saudi Arabia had made proposals to manage output and was ready to talk.
Friday's surprise move by Japan to cut interest rates to negative levels continued to provide support for bonds. Japanese government bond yields hit record lows, and bets the European Central Bank will cut its rates again next month also sent German five-year bond yields
In the United States, however, the bond market was lower, with the 10-year benchmark yield (US10YT=RR) rising to 1.95 percent.
In currency markets, the yen had steady at around 121.20 to the dollar
Elsewhere, oil-rich Canada's dollar fell half a percent against its U.S. counterpart CAD=D4 after the weak economic data dragged oil prices (LCOc1) down from overnight highs as lofty as $36 a barrel. Fellow oil exporter Norway's currency slipped 0.3 percent versus the euro.
Get The News You Want
MSCI's 46-country All World share index (MIWD00000PUS), which lost over 6 percent last month in its worst start to a year since the height of the global financial crisis in 2008, was in the red, slipping 0.1 percent.
Chinese stocks <.SSEC> (CSI300) slipped more than 1 percent after the weak data strengthened calls for more stimulus.
Written By: Reuters
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.