(Corrects day of the week in first graph)
By David Randall
NEW YORK, Oct 1 (Reuters) - Weak economic data in the United
States and Europe weighed on global stock benchmarks on Tuesday,
sending investors into safe-haven assets and pushing the dollar
to a 29-month high.
European stocks .EU and the euro FRX/ both fizzled after
euro zone manufacturing data showed the sharpest contraction in
almost seven years. U.S. stocks dropped sharply in
early trading on data released showing manufacturing contracted
for the second straight month in September, adding to fears of a
slowdown in the world's largest economy.
On Wall Street, the Dow Jones Industrial Average .DJI fell
157.18 points, or 0.58%, to 26,759.65, the S&P 500 .SPX lost
11.68 points, or 0.39%, to 2,965.06 and the Nasdaq Composite
.IXIC dropped 6.89 points, or 0.09%, to 7,992.45. Each index
had posted modest gains in earlier trading.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.40%.
A slowdown in U.S. economic growth at a time when Europe is
seen as close to falling into a recession would remove one of
the few bright spots among global markets.
"If we look at some of the data out of either Asia Pacific
or the European zone, the U.S. economic data has certainly been
the stand-out across the board," said Art Hogan, chief market
strategist at National Securities in New York.
U.S. stocks initially gained after White House trade adviser
Peter Navarro dismissed reports on Monday that President Donald
Trump's administration was considering delisting Chinese
companies from U.S. stock exchanges as "fake news." China and the United States are to resume trade talks next
week in Washington.
"Whether it was a 'fake news' or not, it is becoming harder
to know exactly what the U.S. administration will be doing,"
said Takashi Hiroki, chief strategist at Monex Securities.
Concerns over the economy helped send investors into the
perceived safety of bonds. Benchmark 10-year notes US10YT=RR
last rose 8/32 in price to yield 1.6473%, from 1.673% late on
Monday.
British government bonds had sold off as Prime Minister
Boris Johnson pitched new proposals for an amended Brexit
agreement that would remove the contested insurance policy for
the Irish border. "We had reached extreme lows (for bond yields) in August,
but now the central banks have delivered the easing markets were
expecting, I think we needed this correction," said Pooja Kumra,
a European rates strategist at TD Securities.
The World Trade Organization cut its forecast for growth in
global trade this year by more than half on Tuesday and said
further rounds of tariffs and retaliation, a slowing economy and
a disorderly Brexit could squeeze it even more.
Oil prices rebounded after data showed production by the
world's largest oil producers fell in the third quarter. It also
came after an 8% drop over the past few months.
U.S. West Texas Intermediate (WTI) crude CLc1 rose 0.6% to
$54.39 per barrel after falling 3.3% on Monday. Brent LCOc1
was up 0.8% at $59.70 a barrel.
"Any rallies, though, are likely to be met with plenty of
sellers as a slowing global economy and the recovery of Saudi
production outweigh any Middle East risk factors for now," said
Jeffrey Halley, a senior market analyst for Asia Pacific at
OANDA in Singapore.
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Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets in 2019 http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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