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Bloomberg
US stocks erased earlier gains to trade lower as investors weighed the impact of the economic crisis in Turkey creeping into global markets. The dollar reached the highest in more than a year, while developing-nation currencies slumped.
The S&P 500 Index was flat and Dow Jones Industrial Average retreated in light summer trading, while strength in technology propped up the Nasdaq 100 Index. Volume on the S&P 500 was 11 percent below normal for this time of day, and trading on the Dow was down 20 percent. Gold sank to its lowest price since January 2017 and oil slid more than
2 percent.
The Stoxx Europe 600 Index recovered from its lows but was still dragged down by banks, which are heavily exposed to borrowers in Turkey. Treasuries dipped, and Italian bonds led a slump in European peripheral debt.
The Turkish lira tumbled again alongside the country’s equities after President Recep Tayyip Erdogan maintained his defiance towards both the US and financial-market orthodoxy in speeches. Central bank moves to boost liquidity provided little relief. The pain spread across emerging-market assets and the South African rand touched the lowest since June 2016.
“The efforts of regulators on the European continent and in the UK over the last eight-plus years to fortify their respective banks will likely mitigate damage — should it occur — and prevent development of systemic risk or contagion from spreading,†Oppenheimer & Co. strategists led by John Stoltzfus wrote in a note to clients.
The leading gainer on the S&P 500 was Nielsen Holdings Plc, which rose 9 percent after billionaire Paul Singer’s hedge fund Elliott Management Corp. took a position in the company with the intention of pushing for a sale. Meanwhile, in Europe shares of Bayer AG plunged on concern about the potential costs of a legal battle over Roundup weed killer.
China releases industrial production, fixed-asset investment and retail sales data on Tuesday. Germany releases gross domestic product data for the second quarter and the UK publishes unemployment figures on Tuesday. Earnings are due this week from companies including Tata Steel, Maersk, Home Depot, China Unicom, Tencent, Cisco, Walmart, and Carlsberg. Brexit talks between the EU and the UK resume in Brussels on Thursday. Retail sales data in the US is on Wednesday, followed by housing data on Thursday.
The S&P 500 Index was down 0.2 in New York, while the Dow Jones Industrial Average fell 0.4 percent. The Stoxx Europe 600 Index declined 0.3 percent. The MSCI All-Country World Index dropped 0.5 percent to the lowest in a month. The MSCI Emerging Market Index plunged 1.9 percent to the lowest since July 2017.
The Bloomberg Dollar Spot Index gained 0.3 percent to the highest since June 2017. The euro was little changed at $1.141. The Japanese yen rose 0.1 percent to 110.72 per dollar. South Africa’s rand sank 1.6 percent to 14.3242 per dollar, the weakest since November. The MSCI Emerging Markets Currency Index fell 0.8 percent to the lowest in 13 months.
The yield on 10-year Treasuries rose less than one basis point to 2.8678 percent. Germany’s 10-year yield was little changed at 0.318 percent. Britain’s 10-year yield added two basis points to 1.264 percent.
The Bloomberg Commodity Index declined 1.2 percent. West Texas Intermediate crude slid 2.3 percent to $66.10 a barrel.