(Bloomberg)
(Bloomberg)

US markets fall amid weak economic data; bonds decline

  • The S&P 500 headed for its first decline in four sessions after factory data in both Europe, US came in below expectations
  • West Texas Intermediate crude fell 0.7% to $56.76 a barrel

US stocks drifted lower in thin trading, while Treasuries also declined as investors grappled with concerns about growth and the latest twists in global trade.

The S&P 500 edged toward its first decline in four sessions after economic data in both Europe and US came in below expectations, reigniting worries about the world economy. Facebook contributed the most to the benchmark’s slide, while Microsoft provided the biggest boost. Health-care stocks were pulled down as Johnson & Johnson dropped after the company said it received subpoenas from federal prosecutors tied to its talc baby-powder products.

The 10-year Treasury yield rose above 2.69%, and the dollar gained against major currencies amid headlines showing uneven progress in trade talks between the US and China as a 1 March deadline for more tariffs approaches. The Aussie dollar dropped on reports China’s Dalian port banned coal imports from Australia. West Texas oil fell below $57 a barrel after an industry report showed American crude stockpiles continue to swell.

“We woke up with the manufacturing PMIs internationally starting the tone...with some of them slipping below 50, which is typically the line in the sand of a potential slowdown,’’ said Matthew Miskin, a market strategist at John Hancock Investments in Boston. “We’re due to take a break. We’ve seen such a huge momentum shift to start the year.’’

Investors are also closely watching incoming economic numbers to see how they may nudge central bankers that are in a wait-and-see stance. At the same time, the slow but apparently steady progress in trade negotiations between the world’s biggest economies could set up risk assets for disappointment as some analysts see a truce priced into markets, with the MSCI’s global gauge of stocks up about 15% since Christmas Day.

In Europe, lenders led shares lower as minutes of the latest ECB meeting showed policy makers setting up their March gathering as a key session to render their verdict on a regional slowdown and whether new long-term bank funding is required.

And these are the main moves in markets:

Stocks

The S&P 500 Index fell 0.3% as of 1:30 pm New York time. The Stoxx Europe 600 Index dipped 0.3%. The UK’s FTSE 100 Index decreased 0.9% to the lowest in more than a week. Germany’s DAX Index gained 0.1% to the highest in more than 11 weeks. The MSCI Asia Pacific Index increased 0.2% to the highest in almost 20 weeks. The MSCI Emerging Market Index advanced 0.2% to the highest in almost six months.

Currencies

The Bloomberg Dollar Spot Index rose 0.2%. The euro was steady at $1.1338. The British pound was little changed at $1.3054. The Japanese yen climbed 0.1% to 110.72 per dollar.

Bonds

The yield on 10-year Treasuries advanced four basis points to 2.68%, the highest in a week. Britain’s 10-year yield jumped four basis points to 1.225%, reaching the highest in two weeks. Germany’s 10-year yield climbed four basis points to 0.14%, the highest in two weeks.

Commodities

Gold declined 1.1% to $1,333.20 an ounce. West Texas Intermediate crude fell 0.7% to $56.76 a barrel.

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