New York (AFP) – Wall Street stocks tumbled Thursday after weak manufacturing data sparked worries about a US recession, while European stocks slumped on disappointing bank earnings. US equities had risen at the open of trading after Federal Reserve Chair Jerome Powell on Wednesday opened the door to a September interest rate cut during a press conference.
However, stocks began moving lower after the Institute for Supply Management’s manufacturing index came in at 46.8 percent in July, down from the prior month and weaker than analyst estimates. “The market might be beginning to fear that the economy is slowing to the point where we might be looking at a recession eight to 12 months from now,” said Peter Cardillo of Spartan Capital, who also noted that jobless claims topped estimates. All three major indices finished decisively lower, with the tech-rich Nasdaq Composite Index falling the most at 2.3 percent.
Markets will get another key US economic data point on Friday with monthly jobs data. Meanwhile, the Bank of England cut its main interest rate for the first time since the Covid pandemic broke out in 2020, reducing borrowing costs by a quarter-point to 5.0 percent. The decision hurt the pound but was not enough to save London stocks, which fell victim to a downward shift across Europe, where hotter-than-expected eurozone inflation released Wednesday raised uncertainty about whether the European Central Bank would cut interest rates in September after doing so in June. Both Frankfurt and Paris stocks finished more than two percent lower.
Asset manager Adrien Roure at Indosuez noted high volatility in European trading and said investors were being influenced “by company results today, particularly in the banking sector.” Shares in French bank Societe Generale slumped 8.9 percent as it cut its earnings guidance. British bank HSBC saw its shares fall 6.9 percent, Lloyds 5.3 percent, and Barclays 4.6 percent. In Italy, UniCredit fell 5.7 percent and Intesa Sanpaolo shed 3.9 percent. Spanish banks Banco de Sabadell fell 5.6 percent, BBVA 5.0 percent, and Santander 4.2 percent. Elsewhere, oil prices retreated after rallying the prior day as analysts viewed the rising tensions in the Middle East as unlikely to affect crude market movements.
– Key figures around 2030 GMT –
New York – Dow: DOWN 1.2 percent at 40,347.97 (close)
New York – S&P 500: DOWN 1.4 percent at 5,446.68 (close)
New York – Nasdaq Composite: DOWN 2.3 percent at 17,194.15 (close)
London – FTSE 100: DOWN 1.0 percent at 8,283.36 (close)
Paris – CAC 40: DOWN 2.1 percent at 7,370.45 (close)
Frankfurt – DAX: DOWN 2.3 percent at 18,083.05 (close)
EURO STOXX 50: DOWN 1.6 percent at 4,765.72 (close)
Tokyo – Nikkei 225: DOWN 2.5 percent at 38,126.33 (close)
Hong Kong – Hang Seng Index: DOWN 0.2 percent at 17,304.96 (close)
Shanghai – Composite: DOWN 0.2 percent at 2,932.39 (close)
Dollar/yen: DOWN at 149.66 yen from 149.98 yen on Wednesday
Euro/dollar: DOWN at $1.0750 from $1.0826
Pound/dollar: DOWN at $1.2735 from $1.2856
Euro/pound: UP at 84.71 pence from 84.21 pence
West Texas Intermediate: DOWN 2.1 percent at $76.31 per barrel
Brent North Sea Crude: DOWN 1.6 percent at $79.52 per barrel
burs-jmb/acb
© 2024 AFP
