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S&P, Dow lose 2018 gains as global growth fears grip Wall Street

Reuters 

By Shreyashi Sanyal

(Reuters) - The S&P 500 and the slipped back to losses for the year on Thursday, as U.S. stocks fell on mounting worries of slowing global growth after a fresh twist in China-U.S. tensions as well as and U.S. bond yields.

The arrest of Chinese maker Huawei Technologies Co Ltd's at the request of the cast fresh doubts over the prospect of and striking a deal on trade tariffs in their 90-day truce period.

"Markets are extremely sensitive to any regarding trade. The potential slowdown in global growth is also something the markets are pricing in," said Massud Ghaussy, at IR Intelligence in New York.

The Dow and the S&P were down more than 1.5 percent, tracking 0.4 percent losses for the year despite coming well off their session lows. The two indexes and the had tumbled more than 3 percent each on Tuesday.

Optimism after the trade truce over the weekend boosted Wall Street on Monday, extending a rally from last week when the Federal Reserve signalled a slower pace of interest rate hikes.

But that optimism faded on Tuesday and, along with a drop in longer-dated U.S Treasury yields, triggered a slide in equities that continued on Thursday. Markets were closed on Wednesday.

The benchmark 10-year Treasury yield held at three-month lows as traders bet on fewer rate hikes after data showed U.S. trade deficit hit a 10-year high in October and that the pace of job growth was moderating. [US/]

"We have a repricing of risk as shown in rising bonds (prices), but is obviously adding to the negativity in equities," said Ghaussy.

fell after an OPEC meeting in over production policy ended without a decision. Earlier the group signalled it may agree to a smaller cut than expected. [O/R]

All the 11 S&P sectors were in the red. fell 0.90 percent, 3.27 percent and the trade-sensitive industrials <.SPLRCI> 2.07 percent.

The biggest drag came from a 2.90-percent slump in financials <.SPSY> as bond yields fell and bets of a rate hike were pushed lower.

At 1:02 p.m. ET, the <.DJI> was down 450.24 points, or 1.80 percent, at 24,576.83, the S&P 500 <.SPX> was down 39.13 points, or 1.45 percent, at 2,660.93 and the Composite <.IXIC> was down 40.15 points, or 0.56 percent, at 7,118.28.

The CBOE Index <.VIX>, the most widely followed barometer of expected near-term for the S&P, jumped to its highest since Oct. 29.

fell 1.8 percent and was the biggest drag on the S&P and the Nasdaq, while Boeing Co's 4.5 percent decline weighed the most on the Dow.

Gains in , Google-parent Alphabet Inc and kept the communication services sector <.SPLRCL> flat.

Declining issues outnumbered advancers for a 3.38-to-1 ratio on the NYSE and a 2.20-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and 70 new lows. The Nasdaq recorded eight new highs and 337 new lows.

(Reporting by in Bengaluru; Editing by and Sriraj Kalluvila)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, December 07 2018. 00:26 IST
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