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Bloomberg
US stocks slumped as investors sifted through the latest batch of corporate earnings, while the dollar fell with Treasuries amid speculation recent moves had gone too far too quickly.
The S&P 500 Index fell from near a record high, with weak results hammering shares in Chipotle Mexican Grill Inc. and Advanced Micro Devices Inc. Ten-year Treasury yields retreated after breaching 2.47 percent, their highest since March. Yields on core government bonds in Europe gained after data showed German business confidence unexpectedly climbed to a record in October.
The loonie fell as Canada’s central bank kept interest rates unchanged, warning it would remain “cautious†when considering future increases. Bloomberg’s dollar index turned lower, while Mexico’s peso rallied. Sterling jumped as accelerating UK growth spurred rate-hike bets.
The risk-on mood that’s gripped markets in recent days eased with equities at or near records globally and Treasuries in a tailspin. Investors are looking hard at earnings and economic data for indications of broadening growth that may keep the rallies alive even as the Federal Reserve and other central banks start to pull back on stimulus. The European Central Bank is expected to announce a reduction in the size of its monthly bond buying at its policy meeting on Thursday, the biggest scheduled event for markets this week.
The Stoxx Europe 600 Index declined as companies in the region reported mixed results. Benchmarks in Asia were largely higher, but Japan’s Nikkei finally snapped its record run of gains.
India’s S&P BSE Sensex jumped as much as 1.6 percent after PM Narendra Modi’s government said it will inject an unprecedented $32 billion into the banks over two years to revive growth.
South Korea reports on GDP and Hong Kong on imports and exports, while Japan reports on CPI later in the week. The US economy probably expanded at about a 2.5 percent annualised pace in the third quarter, restrained in part by the effects of two hurricanes, economists forecast the government to report
on Friday.
The S&P 500 Index fell 0.52 percent at 10:47 am in New York, while the Dow Jones Industrial Average declined 0.32 percent. The Stoxx Europe 600 Index fell 0.47 percent. The UK’s FTSE 100 Index decreased 0.88 percent. Germany’s DAX Index decreased 0.43 percent.
The Bloomberg Dollar Spot Index decreased 0.3 percent, the biggest drop in two weeks. The euro gained 0.4 percent to $1.1813. The British pound climbed 0.8 percent to $1.3244, the largest increase in almost six weeks.
The rand fell 1.6 percent to 13.974 per dollar, the weakest in 10 months. The Mexican peso rose 1 percent against the greenback; the Canadian dollar sank 0.9 percent. Germany’s 10-year yield climbed one basis point to 0.48 percent, the highest in 12 weeks. Japan’s Topix index fell 0.3 percent and the Nikkei 225 declined 0.5 percent at the end of trading in Tokyo. Australia’s S&P/ASX 200 Index rose 0.1 percent. The Hang Seng Index climbed 0.5 percent, while the Shanghai Composite Index gained 0.3 percent.