Stocks pare drop on ISM data; EM assets wobble

Bloomberg

US stocks pared losses after a gauge of US manufacturing hit a 14-year high, bolstering confidence in the world’s largest economy. The dollar climbed as trade tensions persisted and emerging markets remained under pressure.
The S&P 500 was little changed after falling as much as 0.5 percent. Nike Inc. fell amid a politically controversial ad campaign and Facebook Inc. slumped on an analyst downgrade. The greenback jumped, with turmoil in currencies moving beyond Turkey and Argentina to South Africa.
Declines in Treasuries, gold and the yen left investors with few havens. South Africa’s rand tumbled as the country entered a recession. Oil climbed as a storm threatened US production on the Gulf Coast.
The factory data buttressed a market under pressure as trade tensions between America and Canada still simmer and the Trump administration moved towards more tariffs against Chinese goods.
Nike’s new ads contributed to the charged political atmosphere, while Facebook’s woes persisted.
Investors are also weighing the emerging-market turmoil after South Africa unexpectedly fell into a recession and Argentina’s urgent financial measures increased concern about more volatility in stocks and currencies. The jitters may add to the outperformance of developed markets, which advanced during the summer despite trade salvos and a Federal Reserve that’s heading toward a late-September rate hike.
Elsewhere, copper fell and the pound extended a decline. Italian 10-year notes jumped on the government’s more conciliatory stance towards European Union spending limits.
Executives from Facebook, Twitter and Google on Wednesday testify on social media, Russia meddling. US manufacturing, construction and employment reports for August are due this week.
The S&P 500 lost 0.2 percent in New York. The Dow Jones Industrial Average slipped 0.3 percent. Nike fell 2.7 percent and Facebook dropped 3.3 percent. The Stoxx Europe 600 Index decreased 1 percent to the lowest in two months. The MSCI All-Country World Index fell 0.4 percent to the lowest in more than a week. The MSCI Emerging Market Index fell 0.3 percent, reaching the lowest in more than two weeks.
The Bloomberg Dollar Spot Index increased 0.5 percent to the highest in almost three weeks. The euro fell 0.5 percent to $1.1564, the weakest in more than a week. The Japanese yen dipped 0.2 percent to 111.29 per dollar. The Turkish lira sank 0.6 percent to 6.6771 per dollar, the weakest in more than three weeks. South Africa’s rand decreased 2.4 percent to 15.2194 per dollar, the weakest in more than two years. The MSCI Emerging Markets Currency Index sank 0.6 percent to the lowest in almost 16 months.
The yield on 10-year Treasuries gained three basis points to 2.89 percent. Germany’s
10-year yield gained one basis point to 0.34 percent. Britain’s 10-year yield was unchanged at 1.404 percent.