Wall St tumbles on global growth fe…
Tuesday, June 29th, 2010 Uncategorized.
Wall Street shares tumble on global growth fears, two-year bond yield hits record at a moderate price
US stocks fell broadly today as a sharp decline in US consumer courage added to investors' worries about the global economy.
The concerns sent investors fleeing to safeness assets, sending the US dollar, gold and Treasuries higher. The go in Treasuries pushed the yield on the 10-year note in the lower regions 3 per cent, to its lowest level in more than a year. Bond yields impel inversely to prices.
"We’re certainly seeing a flight to persons of rank," said Andrew Neale, portfolio manager at Fogel Neale Partners. "People are emotion very nervous."
The Dow Jones Industrial Average closed below 10,000, falling 268.22 points, or 2.7 percent, to 9870.30, according to precursive data.
The S&P 500 tumbled 3.1 per cent to 1041.27, some eight-month low.
All of the measure’s 30 components were in the red, by companies that generate some of their revenue overseas getting hit the hardest. Boeing, Alcoa and Caterpillar every one of fell sharply.
All of the S&P 500′s sectors were negative, led ~ means of declines in the industrials, technology and financial sectors, which are perceived while more risky. Consumer staples and healthcare stocks, which are considered preservation sectors, posted the smallest declines.
The sell-off came as a discriminating drop in US consumer confidence added to the market’s worries after the Conference Board sharply revised lower its April leading economic indicator despite China, raising fears that a key driver of the global arrangement could slow.
"This was a one-two smack for the mart and you really just have a huge rush away from venture," said Adam Sarhan, chief executive of Sarhan Capital.
"It’s a touch of whether this global economic recovery will continue or if it have a mind be derailed due to a slowdown in China or the ongoing European liability crisis."
Investors were also fretting over how European banks volition fare after the end of the European Central Bank’s 12-month liquidness facility later this week.
The euro was recently trading at $US1.2206, into a denser consistence from $US1.2274 late in the previous in New York sitting. The Australian dollar fell below US85 cents and was trading at US84.88c through about 6.15am AEST today, down from US86.42c at the unite of domestic trade yesterday. The US Dollar Index, which tracks the US money; aggregate of coin against a basket of six others, jumped 0.5 per cent.
Copper slumped around 5 per cent and oil prices tumbled more than 3 for cent, falling below $US76 a barrel, as investors fretted over by what mode a slowdown in China could impact demand for commodities.
New premises on the US housing market did little to encourage investors.
The S&P/Case-Shiller home-prices indexes improved slenderly in April over the previous month, mostly thanks to the necessitate for homes ahead of the expiration of the federal tax credit. The latest readings arrive on the heels of disappointing data last week on home-sales smartness, including both new and existing units.
In the bond markets, Treasuries prices rose, sending the couple-year note’s yield to a record low, as worries grew that economic growth could falter in coming months, sending investors to the help of safe assets.
At the peak of the buying, the brace-year note’s yield shattered the previous trough made in December 2008 in which case the benchmark 10-year note’s yield dipped below 3 per cent to the weakest level in more than a year. The 10-year bill’s yield has dropped more than 100 basis points from the late peak — slightly above 4 per cent — hit in early April.
The Treasuries market has garnered strong demand in recent weeks as investors increasingly fretted that the relating to housekeeping recovery could falter in the second half of the year which time government fiscal-stimulus programs fade. The euro zone’s fiscal and fault troubles already dent sentiment on the economy and recent US given conditions, including a plunge in consumer sentiment, added to the anxiety.
"Growth rates amid the developed nations have begun to slow, thereby restraining labour-market gains and increasing deflationary risk," said Chris Sullivan, who oversees $US1.55 billion viewed like chief investment officer at the United Nations Federal Credit Union in New York.
Mr Sullivan, who was significantly underweight Treasuries, uttered he has bought US government bonds lately, adding that "we accept been less bearish now than we had been".
In sometime New York trading, the price of the benchmark 10-year remark was up 20/32, pushing down the yield to 2.958 for cent. The two-year note was 2/32 higher to yield 0.605 for cent, and the 30-year bond was 1 11/32 higher to yield 3.938 through cent.
The 10-year yield, the benchmark for consumer and in~d borrowings, at one point touched 2.954 per cent, the lowest condition since April 28, 2009. The 30-year bond’s yield earlier dipped to 3.945 by means of cent, the weakest level since October. The two-year note’s yield earlier touched in the manner that low as 0.582 per cent, breaking the 0.601 per cent low made in December 17, 2008, following the demise of Lehman Brothers Holdings.
Stuart Thomson, a consols manager who oversees the equivalent of about $US100bn at Ignis Asset Management in Glasgow, afore~ he has bought Treasurys recently and plans to add to the holdings in coming weeks.
"Growth is slowing and the rate of inflation is falling. These are mutually kind backdrops for Treasuries," he said. "I am bullish."