Oil Rout Drags Global Stocks Lower
14 November 2018 - 9:07AM
Dow Jones News
By Georgi Kantchev
Global stocks edged lower Wednesday amid a continued fall in oil
prices and mounting questions about global growth.
The Stoxx Europe 600 was down 0.7% shortly after the open,
dragged down by energy stocks. Asian markets were mostly in the
red.
On Wall Street, futures pointed to an opening loss of 0.2% for
both the S&P 500 and the Dow Jones Industrial Average.
Oil prices extended their drop after sinking deeper into a bear
market Tuesday as concerns about oversupply and weakening demand
engulfed the market. U.S. crude prices were down 0.4% after a 7.1%
tumble on Tuesday, the steepest fall in three years.
The drop in crude prices adds to a volatile stretch for broader
financial markets, already under pressure from international trade
frictions, a selloff in the tech sector and problems in the
eurozone. Stocks have struggled to reach new highs since the
S&P 500 capped off its worst month in more than seven years in
October.
"There are a lot of issues out there: geopolitics, oil, trade
wars, Brexit, take your pick," said Eric Stein, co-director of
global income at Boston-based Eaton Vance. "It means more
volatility is in store for the foreseeable future."
Mixed economic data out of China added to signs that global
growth might be slowing down. Business activities in the world's
second largest economy were mixed in October, as retail sales grew
at the slowest pace in five months, while growth in industrial
output and investment accelerated.
The data came as investors were watching for the latest moves in
the trade spat between U.S. and China. The two countries have
renewed talks on trade ahead of a meeting between President Trump
and President Xi Jinping, set for the end of the month at the Group
of 20 nations summit in Buenos Aires.
In currencies, the WSJ Dollar Index, which tracks the dollar
against a basket of 16 currencies, was broadly flat. The 10-year
U.S. Treasury yield fell to 3.141%, compared with 3.145% on
Tuesday. Yields move inversely to prices.
In Europe, investors were watching the latest developments in
the Brexit negotiations after Britain and the European Union on
Tuesday hammered out a draft deal on the U.K.'s exit from the
bloc.
The pound was volatile, falling 0.1% against the dollar to
$1.2967 after earlier gains, amid expectations of a contentious
meeting later in the day when Prime Minister Theresa May is set to
put the proposed pact before her deeply divided cabinet on
Wednesday.
"The bad news is that the prime minister now has to sell this to
her divided cabinet and parliament--which will not be an easy
task--whilst also hoping that it is passed by a qualified majority
vote by the rest of the EU," Peter Dixon, analyst at Commerzbank,
wrote in a note to clients.
In Asia, Hong Kong's Hang Seng fell 0.8% while Japan's Nikkei
Stock Average was up 0.2%. China's benchmark Shanghai Composite
Index fell 0.9%.
Write to Georgi Kantchev at georgi.kantchev@wsj.com
(END) Dow Jones Newswires
November 14, 2018 03:52 ET (08:52 GMT)
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