* Tech leads Wall Street lower
* China May industrial production growth at 17-year low
* European stocks suffer biggest fall in two weeks
* Crude prices edge higher on Gulf of Oman tensions
(Updates to late afternoon)
By Stephen Culp
NEW YORK, June 14 (Reuters) - Equity markets lost ground on
Friday as weak Chinese data stoked investor anxieties over a
global growth slowdown and mounting fears of a U.S.-Iran
confrontation added to geopolitical uncertainty, sending oil
prices higher.
However, positive U.S. retail sales data helped boost the
dollar and short-term Treasury yields. Attacks on two oil tankers in the Gulf of Oman lifted oil
prices, although they remained on track for a weekly loss on
worries a sluggish world economy could hurt demand. China's industrial output growth came in well below
expectations, slowing to a more than 17-year low, suggesting
Beijing was feeling the sting of the protracted trade war with
the United States. "The China data certainly is far-reaching, impacting not
only China but global markets as well," said Tim Ghriskey, chief
investment strategist at Inverness Counsel in New York. "That is
one of the big overhangs today."
"The other one is what's happening in the Persian Gulf,
which could turn into a military response versus a peaceful
response," Ghriskey added. "There's still a lot of uncertainty."
A warning of a broad slowdown in chip demand from chipmaker
Broadcom Inc AVGO.O underscored the effects of the U.S.-China
tariff dispute, dragging on European as well as U.S. equity
indexes. The Dow Jones Industrial Average .DJI fell 12.76 points,
or 0.05%, to 26,094.01, the S&P 500 .SPX lost 4.51 points, or
0.16%, to 2,887.13 and the Nasdaq Composite .IXIC dropped
35.78 points, or 0.46%, to 7,801.35.
MSCI's broad gauge of stocks across the globe
.MIWD00000PUS shed 0.33%, while the pan-European STOXX 600
index .STOXX lost 0.40%.
EYES ON THE FED
The Federal Reserve is set to hold its two-day monetary
policy meeting June 18-19, with investors closely watching its
outcome for clarity on when or whether to expect a near-term
rate cut. A Reuters poll showed a growing number of economists expect
the Fed to cut interest rates this year, although the majority
still see it holding steady. "The Fed could surprise us and cut rates," added Ghriskey.
"I wouldn't put it out of the realm of possibility that we could
see the Fed ease next week, but right now the futures aren't
anticipating that."
Growing worries about a new U.S.-Iranian confrontation set
crude prices higher, U.S. crude CLc1 settling up 0.44% at
$52.51 per barrel, with Brent futures LCOc1 gaining 1.1% to
$62.01 per barrel.
The dollar index climbed to its highest in almost two weeks
on Friday after the encouraging retail sales data for May eased
fears that the U.S. economy is slowing sharply.
The dollar index .DXY rose 0.57%, with the euro EUR=
down 0.59% to $1.1209.
The retail data also sent short-dated U.S. Treasury yields
higher, flattening the yield curve and diminishing expectations
for a Fed rate cut in June. L2N23L10H
Benchmark 10-year notes US10YT=RR last fell 1/32 in price
to yield 2.0942%, from 2.091% late on Thursday.
Gold turned negative after hitting a 14-month peak earlier
in the session. Spot gold XAU= dropped 0.1% to $1,340.16 an ounce.
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Rate cuts by central banks https://tmsnrt.rs/2Igfo8O
GRAPHIC-Global assets in 2019 http://tmsnrt.rs/2jvdmXl
GRAPHIC-World FX rates in 2019 http://tmsnrt.rs/2egbfVh
GRAPHIC-MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
GRAPHIC-China trade shock interactive https://tmsnrt.rs/2SRopIf
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