Wall Street stocks fell one per cent yesterday, joining a broad retreat in global equities markets from a six-year high touched last week, while US Treasuries’ yields moved lower.
The dollar fell against major currencies as comments from European Central Bank policymakers curbed expectations of more eurozone economic stimulus and boosted the euro against the greenback.
On Wall Street, losses accelerated and the S&P 500 index of large-cap US companies was on track for a third straight decline and what may be its biggest three-day drop in two months. On Friday, the Nasdaq and S&P indices suffered their worst drop since February.
The Dow Jones industrial average was down 147.68 points or 0.9 per cent, at 16,265.03, the S&P 500 lost 19.5 points or 1.05 per cent, to 1,845.59 and the Nasdaq Composite dropped 56.667 points or 1.37 per cent, to 4,071.058.
Some investors worried that the declines may run on, even as US momentum shares hit hard last week steadied. Prices of momentum shares, or stocks in fast-growing industries, surged in recent weeks.
Pfizer Inc, down 3.2 per cent at $31.13, added pressure on the Dow and S&P 500. Pfizer’s experimental breast cancer drug nearly doubled the time patients lived without their disease getting worse in a clinical trial. But overall survival was not shown to be statistically significant, researchers said.
Earlier in the global trading day, Japan’s Nikkei fell 1.7 per cent, while the FTSEurofirst 300 index of top European shares gave up 1.2 per cent at 1,336.11, down from a five-and-a-half-year high on Friday.
Britain’s top equity index, the blue-chip FTSE 100 index , had its biggest one-day decline in a month, retreating from a three-week high as a drop by house builders weighed on the market.
The broader FTSEurofirst measure of 300 European stocks fell 1.25 per cent.
The MSCI world equity index was down 0.91 per cent, having hit levels not seen since late 2007 on Friday.
World equity markets had enjoyed three straight weeks of gains as easing tensions in the Crimea region of Ukraine encouraged investors to add risks.
US Treasuries prices rose, extending last week’s gains as traders reduced bets the Federal Reserve might raise interest rates in the first half of 2015 after a March jobs report that missed some traders’ expectations. The selloff in Wall Street shares also supported demand for US government debt.
Benchmark 10-year Treasuries were up 8/32 in price to yield 2.6935 per cent, while the five-year note US5YT=RR was 6/32 higher, yielding 1.666 per cent.
The dollar lost 0.24 per cent against a basket of six major currencies. The euro rose 0.3 per cent to $1.3742.
Comments from ECB policymakers Ewald Nowotny and Yves Mersch yesterday suggested more monetary easing from the central bank was not imminent, which lifted the euro against the dollar.
Nowotny said there was no need to act immed-iately to counter eurozone disinflation, while Mersch said that while the central bank was drawing up plans for large-scale asset purchases, it remained some way off.
Brent crude oil fell well below $106 a barrel to $105.34, snapping a two-day rise and falling more than one per cent, after Libyan rebels occupying four eastern oil ports agreed to end an eight-month blockade, raising the prospect of increased supply to world markets.
Gold was off, with some investors taking profits after a run-up of one per cent on Friday credited to a short-covering rally by investors who had worried US jobs data would top forecasts.
Spot gold was down 0.45 per cent at $1,298.30 an ounce in early afternoon New York trading.