Slump in oil prices and China data weighs on stocks
* Stocks suffer in two weeks
* Oil slump continues
* U.S. dollar edges up
(Updates with close of U.S. markets, oil settlement prices)
By Chuck Mikolajczak
NEW YORK, Nov 9 (Reuters) - Stocks around the globe suffered
their biggest drop in two weeks on Friday as weak Chinese
economic data sapped demand for equities while oil prices
weakened again on Friday.
U.S. stocks were broadly lower, with energy shares
falling more than 1.0 percent as benchmark Brent crude oil saw a
six-month low and U.S. crude fell below $60 for the first time
Data from China added to the downward pressure, showing
factory-gate inflation slowed for the fourth month in October on
cooling domestic demand and manufacturing activity.
Bad debts at Chinese brokers and banks are also causing
In the U.S., producer prices rose more than expected in
October and at their fastest pace in six years, but measures of
underlying price pressure cooled, bolstering the view that the
U.S. central bank is not facing a resurgence in inflation.
European shares dipped as mining and oil stocks sold off,
but they managed to end the week with a small gain.
"Oil is spooking the market. If oil prices are going to go
lower that's another sign that the global economy is going to
slow its growth," said Chris Zaccarelli, chief investment
officer at Independent Advisor Alliance in Charlotte, North
Carolina. "It looks like a slow (stocks) sell off. All day long
its been drifting lower."
The Dow Jones Industrial Average fell 201.92 points,
or 0.77 percent, to 25,989.3, the S&P 500 lost 25.82
points, or 0.92 percent, to 2,781.01 and the Nasdaq Composite
dropped 123.98 points, or 1.65 percent, to 7,406.90.
Equities snapped a streak of seven straight days of gains on
Thursday after the U.S. Federal Reserve held interest rates
steady but appeared to remain on track to raise its policy
interest rate next month.
The Federal Reserve decision disappointed some investors who
had hoped that the sharp share price falls during what has been
called "Red October" might have encouraged the U.S. central bank
to take a more dovish approach toward monetary policy.
The pan-European STOXX 600 index lost 0.37 percent
and MSCI's gauge of stocks across the globe shed
The U.s. dollar, which had weakened sharply after Tuesday's
U.S. mid-term elections, was up for a second straight day and on
track for a fourth straight week of gains.
Further dollar gains can pose headwinds for risky assets as
that translates into tightening financial conditions as most
emerging market economies borrow in dollars. A strong dollar
could also hurt earnings of multinational U.S. corporations.
The dollar index rose 0.19 percent, with the euro
down 0.26 percent to $1.1333.
The equity weakness pushed bond yields lower. Benchmark
10-year notes last rose 12/32 in price to yield
3.1875 percent, from 3.232 percent late on Thursday.
Oil prices fell to multi-month lows as global supply
increased and investors worried about the possibility of slowing
fuel demand, putting U.S. crude on track for the longest stretch
of daily declines since 1984.
U.S. West Texas Intermediate crude settled down 0.79
percent at $60.19 per barrel and Brent settled at
$70.18, down 0.67 percent on the day.
(Additonal reporting by Sinead Carew;
Editing by Clive McKeef)
First Published: 2018-11-09 02:30:32
Updated 2018-11-09 23:26:25
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