* Nasdaq confirms correction; S&P 500 ends down
* Gold rises more than 1.5%
* Bond price rally drives yields lower
(Updates to closing U.S. market activity)
By Caroline Valetkevitch
NEW YORK, June 3 (Reuters) - The Nasdaq confirmed it was in
a correction on Monday as stocks extended their recent sell-off,
and the continued flight to safe-haven assets pushed 10-year
U.S. Treasury yields to their lowest since September 2017.
The Nasdaq ended the session more than 10% lower than its
May 3 closing record, falling 1.6% on the day after regulatory
fears sent shares of internet giants Alphabet Inc GOOGL.O ,
Facebook Inc FB.O and Amazon.com Inc AMZN.O sharply lower.
But driving the recent fall in stocks and bond yields has
been deepening trade conflicts between the United States and its
partners. The Nasdaq has been falling since its May 3 record high, hit
just before U.S. President Donald Trump's tweet on trade that
set off a month of turbulence. Global stock markets
shed over $2 trillion in value in May. "The slump has been concurrent with fears of slowing global
growth," said Bucky Hellwig, senior vice president at BB&T
Wealth Management in Birmingham, Alabama.
Investors again sought protection from market volatility in
low-risk assets such as Treasuries and gold.
A gloomy economic outlook is prompting traders to increase
bets that the U.S. Federal Reserve will cut interest rates
sooner rather than later.
In late U.S. trading, federal funds futures implied traders
saw about a 67% chance the U.S. central bank would reduce key
short-term borrowing costs by a quarter point to 2.00%-2.25% at
its July 30-31 policy meeting. Yields on U.S. two-year notes US2YT=RR had their biggest
two-day fall since 2008, while U.S. benchmark 10-year Treasury
yields US10YT=RR hit 2.062%, their lowest since September
2017. German government bond yields earlier fell to an all-time
low.
"What the bond market is telling us is that all of these
pressures put together create a likely economic slowdown which
is pushing yields down," said Eric Kuby, chief investment
officer, North Star Investment Management Corp in Chicago.
Treasury yields extended their decline following remarks
from St. Louis Federal Reserve President James Bullard who said
a U.S. rate cut may be "warranted soon" because of global trade
tensions and weak U.S. inflation. Gold prices jumped more than 1.5% to their highest level in
more than three months on the trade concerns. In addition to increasing tariffs on Chinese imports in
recent weeks, the White House has hardened its stance toward
other countries, including Mexico.
The Dow Jones Industrial Average .DJI rose 4.74 points, or
0.02%, to 24,819.78, the S&P 500 .SPX lost 7.61 points, or
0.28%, to 2,744.45 and the Nasdaq Composite .IXIC dropped
120.13 points, or 1.61%, to 7,333.02.
An index of global stocks edged higher on Monday.
The pan-European STOXX 600 index .STOXX rose 0.39% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.07%.
The dollar index .DXY fell 0.52%, while the Japanese yen
strengthened 0.02% versus the greenback at 108.06 per
dollar. In the energy market, oil fell amid the escalating U.S.
trade disputes. Brent crude futures LCOc1 settled at $61.28 a
barrel, losing 71 cents, or 1.2%. U.S. West Texas Intermediate
(WTI) crude CLc1 ended 25 cents, or 0.5%, lower at $53.25 a
barrel.
With the bitter trade mood weighing, factory activity slowed
in the United States, Europe and Asia last month, surveys
showed. The Institute for Supply Management said its gauge of U.S.
manufacturing activity unexpectedly fell in May to the weakest
level in more than 2-1/2 years. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Korea exports https://tmsnrt.rs/2Kn47VJ
Messy May for global markets https://tmsnrt.rs/2WJboFV
US 2-year yield in biggest two day fall since 2008 crisis https://tmsnrt.rs/2WFaY3b
Asian stock markets : https://tmsnrt.rs/2zpUAr4
Rising trade tension on U.S. rate-cut expectations png https://tmsnrt.rs/2KdE2by
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