Weak earnings dragged stocks lower yesterday and oil fell on continued oversupply concerns, while Treasuries prices rose ahead of US jobs numbers seen as key to determine the timing of a rate hike from the Federal Reserve.
Sterling fell sharply against the US dollar after just one Bank of England official voted for higher interest rates at a meeting in which the bank said a strong pound and low oil prices would keep inflation subdued.
Wall Street traded lower, weighed by a second day of sharp declines in media companies after Viacom’s earnings miss was linked to viewers increasingly shifting to online streaming.
At 3.33pm GMT the Dow Jones industrial average fell 112.61 points, or 0.64 per cent, to 17,427.86, the S&P 500 lost 16.41 points, or 0.78 per cent, to 2,083.43 and the Nasdaq Composite dropped 78.97 points, or 1.54 per cent, to 5,060.98.
London’s FTSE 100 equity index fell 0.1 per cent, outperforming a 0.8 per cent drop for the pan-European FTSEurofirst 300 index. Weak corporate results hit the shares of enzyme company Novozymes and Deutsche Post .
A gauge of stocks across the globe fell 0.6 per cent. Emerging market stocks slipped to their lowest in over two years on nervousness about the timing and scope of a US interest rate hike and continued weakness in commodity markets.
Market participants were looking ahead to US jobs data today that could give a strong pointer to when the Fed will raise rates for the first time in nearly a decade. The Fed next meets in mid-September.
US Treasuries prices rose on caution ahead of the key US jobs report, while reduced inflation fears also supported long-dated Treasuries prices.
US 30-year Treasuries prices were last up 29/32 in price to yield 2.898 per cent compared with a yield of 2.943 per cent late Wednesday. Benchmark 10-year notes US10YT=RR were last up 11/32 in price to yield 2.230 per cent, compared with a yield of 2.268 per cent late Wednesday.
Sterling fell 0.6 per cent to $1.5504, having traded as high as $1.5636.
The euro was little changed versus the greenback at $1.0907 with the dollar index on track for a second straight week of gains, lifted by a batch of economic data that, overall, has reinforced expectations that the Fed will raise interest rates next month.
Brent futures, the global oil benchmark, fell more than 1 per cent to hit a low of $48.88 per barrel, its lowest since late January.
US crude set a day low of $44.20, not far from the six year low of $42.05 hit in March.
“Prices are likely to consolidate or weaken further,” Carsten Fritsch, an oil analyst at Commerzbank, said. “The perception is that over-supply will be there for much longer.”
London copper was flat after gaining as much as 0.8 per cent, still near a six year low hit earlier this week.
Spot gold struggled to pull away from a 5-1/2-year low as it stood near $1,090 an ounce.