(Updates to U.S. afternoon trading)
By David Randall
NEW YORK, Oct 1 (Reuters) - Weak economic data in the United
States and Europe weighed on global stock benchmarks on Tuesday,
sending investors into safe-haven assets.
European stocks fizzled after euro zone
manufacturing data showed the sharpest contraction in almost
seven years. U.S. stocks and the dollar dropped
sharply on data showing manufacturing contracted to a 10-year
low in September, adding to fears of a slowdown in the world's
largest economy as a result of the trade war with China
"The PMIs across the globe have continued to deteriorate and
obviously we are in line with that deterioration. It's all due
to the trade war," said Peter Cardillo, chief market economist
at Spartan Capital Securities in New York.
On Wall Street, the Dow Jones Industrial Average .DJI fell
244.36 points, or 0.91%, to 26,672.47, the S&P 500 .SPX lost
23.68 points, or 0.80%, to 2,953.06 and the Nasdaq Composite
.IXIC dropped 48.13 points, or 0.6%, to 7,951.21. Each index
had posted modest gains in earlier trading. MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.58%.
A slowdown in U.S. economic growth at a time when Europe is
seen as close to falling into a recession would remove one of
the few bright spots among global markets.
"If we look at some of the data out of either Asia Pacific
or the European zone, the U.S. economic data has certainly been
the stand-out across the board," said Art Hogan, chief market
strategist at National Securities in New York.
U.S. stocks initially gained after White House trade adviser
Peter Navarro dismissed reports on Monday that President Donald
Trump's administration was considering delisting Chinese
companies from U.S. stock exchanges as "fake news." China and the United States are to resume trade talks next
week in Washington.
"Whether it was a 'fake news' or not, it is becoming harder
to know exactly what the U.S. administration will be doing,"
said Takashi Hiroki, chief strategist at Monex Securities.
Concerns over the economy helped send investors into the
perceived safety of bonds. Benchmark 10-year notes US10YT=RR
last rose 9/32 in price to yield 1.6421%, from 1.673% late on
Monday. British government bonds had sold off as Prime Minister
Boris Johnson pitched new proposals for an amended Brexit
agreement that would remove the contested insurance policy for
the Irish border. "We had reached extreme lows (for bond yields) in August,
but now the central banks have delivered the easing markets were
expecting, I think we needed this correction," said Pooja Kumra,
a European rates strategist at TD Securities.
The World Trade Organization cut its forecast for growth in
global trade this year by more than half on Tuesday and said
further rounds of tariffs and retaliation, a slowing economy and
a disorderly Brexit could squeeze it even more.
Oil prices slipped after the weak U.S. data was released,
with U.S. crude CLcv1 down 0.7% to $58.84 a barrel and Brent
LCOc1 down 1.1% to $53.47.
Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets in 2019 http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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