Tech Stocks, Dollar Fall as Global Tensions Rise: Markets Wrap

(Bloomberg) -- Technology companies pulled stock indexes lower, while the dollar dropped as investors eyed a growing list of global concerns. Treasuries rose.

The tech-heavy Nasdaq indexes led losses Monday, while small caps gained after President Donald Trump on Sunday threatened more tariffs on Chinese goods. The S&P 500 deepened declines following its biggest weekly retreat since March, holding near the key 200-day moving average. Bank of America Corp. dropped after posting quarterly results, while Harris Corp. and L3 Technologies Inc. surged on the announcement of a merger.

The dollar touched a two-week low against peers, while the 10-year Treasury yield traded around 3.15 percent after U.S. retail sales in September fell short of analysts’ estimates. West Texas crude advanced amid tensions between Saudi Arabia and the U.S. over the disappearance of a prominent journalist. Gold headed toward its fourth gain in five days.

"The overall trade tensions and geopolitical tensions with China leads to more worries about global growth and about general growth in the marketplace. That certainly impacts tech,” Chris Gaffney, president of world markets at TIAA Bank, said in an interview. “We’re not seeing a follow-through on the big recovery we saw on Friday. Instead, we’re seeing investors stay on the sidelines today. They’re trying to figure out if this is the start of a longer-term correction or just a healthy move lower setting up for a longer recovery.”

While global tensions were on full display this weekend, with the IMF warning of more market volatility and U.S.-China trade war rhetoric increasing, investors are also trying to gauge the direction of the American economy and earnings from last quarter that are starting to roll in. Anything hinting of a slowdown or stronger growth that could impact the pace of Federal Reserve rate hikes will push markets around.

Elsewhere, European equities rose while Asia stocks fell. In Frankfurt, stock trading resumed after the opening was delayed by a technical glitch. Italian bonds pared earlier gains as the nation prepared to meet Monday’s midnight deadline for euro-area governments to turn in fiscal budgets.

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Here are some key events coming up this week:

• APEC finance ministers meet in Port Moresby, Papua New Guinea
• China’s new yuan loans may have risen to 1.36 trillion yuan ($196 billion) in September from August’s 1.28 trillion yuan as officials sought to buoy economic growth. On Tuesday, consensus is for CPI to pick up to 2.5 percent growth and PPI to slow to 3.6 percent.
• Third-quarter GDP for China comes Friday, with headline growth forecast to slow to 6.6 percent year on year from 6.7 percent, in addition to last month’s retail sales and factory output.
• Minutes from the Federal Reserve’s latest policy meeting are due on Wednesday, with investors focused on projections for further interest rate rises.
• Goldman Sachs, Morgan Stanley and Netflix are among companies reporting this week.
• Euro-area governments, including Italy, must turn in fiscal budget proposals to the European Commission by midnight Monday.

These are the main moves in markets:

Stocks

• The S&P 500 Index fell 0.6 percent to 2,750.79 as of 4 p.m. New York time.
• The Nasdaq Composite Index dropped 0.9 percent, while the Nasdaq 100 slid 1.2 percent.
• The Russell 2000 Index rose 0.4 percent.
• The Stoxx Europe 600 Index gained 0.1 percent.
• The MSCI All-Country World Index dipped 0.2 percent.
• The MSCI Emerging Market Index declined 0.7 percent.

Currencies

• The Bloomberg Dollar Spot Index fell 0.2 percent.
• The euro climbed 0.2 percent to $1.1581.
• The Japanese yen gained 0.3 percent to 111.82 per dollar, the strongest in four weeks.
• The MSCI Emerging Markets Currency Index advanced 0.2 percent.

Bonds

• The yield on 10-year Treasuries decreased less than one basis point to 3.15 percent.
• Germany’s 10-year yield fell less than one basis point to 0.50 percent, the lowest in more than a week.
• Britain’s 10-year yield dipped three basis points to 1.606 percent.

Commodities

• The Bloomberg Commodity Index gained 1 percent.
• West Texas Intermediate crude rose 0.4 percent at $71.63 a barrel.
• Gold gained 0.7 percent to $1,230.80 an ounce, the highest since Aug. 1.

©2018 Bloomberg L.P.