US stocks tumble 19-month low over Washington tumult

Bloomberg

US stocks tumbled to a 19-month low as the turmoil in Washington kept investors on edge after the worst week for American equities in almost a decade.
The S&P 500 slid for a fourth straight day, edging ever closer to a bear market as Treasury Secretary Steven Mnuchin unnerved investors by calling a crisis meeting with financial regulators. The move looked to undermine his attempt to assure financial markets that the president won’t move to oust the head of the Federal Reserve. Traders also assessed the threat to the economy from a government shutdown that looks set to persist into the new year.
Mnuchin’s steps to placate markets came after the worst week for American equities in nearly a decade amid a surge in trading volume. The S&P 500 is down 17 percent from its record and on track for the steepest quarterly drop since the financial crisis. US stock markets closed in New York, ahead of the Christmas holiday.
“The reality is, in Washington you have this massive amount of unpredictability,” Chad Morganlander, portfolio manager at Washington Crossing Advisors, said on Bloomberg TV. That combines with concerns over global growth and removal of stimulus “gives investors this level of chill where they’re going to compress multiples regardless of what the backdrop in 2020 will be,” he said.
Elsewhere, emerging market currencies and shares fell even as China’s top policy makers said they’ll roll out more monetary and fiscal support in 2019, ratcheting up the targeted stimulus of 2018.
Oil dropped even as some OPEC members pledged to deepen output cuts. The euro advanced against the dollar.
The S&P 500 Index fell 0.4 percent in New York. The Nasdaq Composite Index dropped 0.6 percent and the Dow Jones Industrial Average lost 0.5 percent. The Stoxx Europe 600 Index dipped 0.4 percent to the lowest in more than two years. The MSCI All-Country World Index declined 0.2 percent, hitting the lowest in more than 21 months. The MSCI Emerging Market Index decreased 0.5 percent to the lowest in almost eight weeks.
The Bloomberg Dollar Spot Index dipped 0.5 percent. The euro climbed 0.3 percent to $1.1408. The Japanese yen jumped 0.3 percent to 110.85 per dollar, hitting the strongest in more than 15 weeks with its seventh straight advance. The British pound advanced 0.2 percent to $1.2674, the strongest in more than two weeks. The MSCI Emerging Markets Currency Index fell 0.2 percent to the lowest in a week on the largest fall in more than a week.
The yield on 10-year Treasuries fell three basis points to 2.76 percent. Britain’s 10-year yield dipped six basis points to 1.263 percent, the lowest in more than a week.
The Bloomberg Commodity Index decreased 0.9 percent to 77.98, the lowest in almost three years. West Texas Intermediate crude dipped 1.8 percent to $44.76 a barrel.