Stocks fall with US futures over cloudy outlook for trade

Bloomberg

Stocks dropped on Tuesday alongside US futures as a cloudy outlook for trade and growth continued to weigh on risk appetite. Treasuries climbed and the yen strengthened.
Futures on the S&P 500, Dow and Nasdaq all pointed to a softer open a day after American markets were shut for a holiday. EBay Inc bucked the trend, surging in early trading after Elliott Management Corp sent a letter to its board outlining steps it says are “urgently needed” to boost its value. The Stoxx Europe 600 Index dipped after Switzerland’s UBS Group AG
delivered disappointing results. European bonds followed Treasuries higher and the dollar edged up for a sixth day.
Earlier, shares retreated across Asia after Chinese President Xi Jinping stressed the need to maintain political stability, comments which hinted at growing concern over the country’s slowing economy.
After stocks and many risk assets kicked off the year with a stellar rally, investors find their conviction tested anew as a familiar litany of concerns weigh on sentiment. The IMF’s dour forecast for global growth, fears of slowing momentum in the world’s second-largest economy and uncertainty over trade are all combining to spook markets.
Elsewhere, the pound rose after UK data showed the jobs market remains resilient and as Labour leader Jeremy Corbyn backed a plan that could open the door to a second Brexit
referendum.
The World Economic Forum, the annual gathering of global leaders in politics, business and culture, opened in Davos, Switzerland, on Tuesday.
The Stoxx Europe 600 Index declined 0.3 percent in New York, the largest drop in more than a week. Futures on the S&P 500 Index extended their drop since Friday to 0.6 percent. The UK’s FTSE 100 Index declined 0.7 percent, the largest drop in more than a week. Germany’s DAX Index dipped 0.5 percent. The MSCI Emerging Market Index declined 0.5 percent, the largest drop in more than a week. The MSCI Asia Pacific Index declined 0.5 percent, the biggest drop in a week.
The Bloomberg Dollar Spot Index rose 0.1 percent, hitting the highest in almost three weeks with its sixth straight advance. The euro decreased 0.1 percent to $1.135, the weakest in almost three weeks. The British pound increased 0.2 percent to $1.2916. The Japanese yen gained 0.2 percent to 109.40 per dollar, the biggest rise in more than a week.
The yield on 10-year Treasuries sank four basis points to 2.75 percent, the largest tumble in more than a week. Germany’s 10-year yield declined two basis points to 0.24 percent. Britain’s 10-year yield fell less than one basis point to 1.319 percent.