World stock markets broadly retreated amid investor caution after a flurry of tepid corporate earnings reports from around the globe, stoking demand instead for safer assets like US Treasuries, pushing yields lower.
Equities on Wall Street were pulled lower a day after the Dow Industrials index cracked the 23,000 barrier for the first time. Shares of Apple fell 2.6 per cent to $155.68 on signs of poor demand for the iPhone 8.
Of the 11 major S&P sector groups, technology, off 0.49 per cent, was the biggest drag.
Traders were marking 30 years to the day since the 1987 Black Monday stock market crash, although many market participants considered another such crash unlikely.
The Dow Jones Industrial Average fell 53.97 points, or 0.23 per cent, to 23,103.63, the S&P 500 lost 5.43 points, or 0.21 per cent, to 2,555.83 and the Nasdaq Composite dropped 36.92 points, or 0.56 per cent, to 6,587.30.
European shares were on track for their biggest drop in two months on concerns over political upheaval in Spain and after disappointing results from large companies such as Unilever, France’s Publicis and Germany’s Kion.
Spain’s central government said it would suspend Catalonia’s autonomy and impose direct rule after the region’s leader threatened to go ahead with a formal declaration of independence if Madrid refused to hold talks.
“The Spain thing is a negative story and considering the market is looking for a reason (to fall) and considering there are other negative stories today they are going to throw everything in the bathtub,” said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.
The pan-European FTSEurofirst 300 index lost 0.62 per cent and MSCI’s gauge of stocks across the globe shed 0.15 per cent.
Madrid’s IBEX was last down 0.7 per cent, after dropping as much as one per cent. Spanish 10-year government bonds last fell 3/32 in price to yield 1.637 per cent, from 1.625 per cent on Wednesday.
That was enough to pull the euro briefly into negative territory though it later recovered to hit a 1-week high on the dollar.
Also putting a damper on risk appetite was data from China, which showed economic growth cooled slightly to 6.8 per cent in the third quarter from a year earlier, from the second quarter’s 6.9 per cent.
Other data showed that China’s industrial output rose a stronger-than-expected 6.6 per cent in September, while retail sales also outperformed.
But property sales fell for the first time in over two years. In addition, People’s Bank of China Governor Zhou Xiaochuan spoke of the risks of a “Minsky moment” in the economy, referring to a sudden collapse in asset prices sparked by debt or currency pressures.