Concerns about lackluster growth in world economies sent Wall Street and other world stock markets lower on Thursday, reversing a Federal Reserve-sparked rally a day earlier.
The dollar gave up some recent gains and U.S. benchmark bond yields touched lows last seen more than a year ago. Investors shrugged off encouraging U.S. jobless data and returned their focus to wilting global economic growth, which could depress U.S. corporate profits.
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A day earlier, investors gave the U.S. stock market its best day of the year, encouraged by Fed meeting minutes that suggested the central bank would not rush interest-rate hikes. Higher rates would curb borrowing and erode the spending power of individuals and companies. German exports fell 5.8 percent in August, the worst decline since January 2009. The data on Thursday from Europe's biggest economy fed anxieties about recession in the euro zone.
The Dow Jones industrial average fell 104.33 points, or 0.61 percent, to 16,889.89, the S&P 500 lost 12.55 points, or 0.64 percent, to 1,956.34 and the Nasdaq Composite dropped 31.31 points, or 0.7 percent, to 4,437.28. Energy shares were once again the biggest losers of the day on Wall Street, continuing a recent trend of weakness amid falling oil prices. Brent oil fell below $91 a barrel, heading back to more than two-year lows. Prices have been hurt by a supply glut and concerns about global economic growth and are now down 20 percent from June. Brent for November delivery was down 45 cents at $90.93, having fallen to $90.59 earlier. U.S. November crude lost 61 cents to $86.70. "Supply is strong, inventories are high and demand in Europe is terrible," said Michael Hewson, head analyst at CMC Markets. The dollar dropped to a three-week low against the yen as investors took profit and pared back bullish bets on the greenback after the Fed released the minutes Wednesday from its most recent policy meeting. The minutes showed officials were concerned about the impact of a stronger dollar on the profits of companies with an international presence, and about lackluster global growth, as they sought an eventual exit from record low rates. The Fed was sending a warning shot to dollar bulls, who had lifted the greenback each week for three months, according to Andrew Wilkinson, chief market analyst at Interactive Brokers LLC in Greenwich, Connecticut. "The Fed notes that the stronger dollar, which could automatically depress demand for US exports, is already depressing commodity prices that in turn is likely to contain inflationary pressures," Wilkinson told clients. U.S. long-dated and benchmark Treasuries yields hit their lowest levels in over a year. Yields on 30-year Treasury bonds hit 3.029 percent, their lowest since May 2013, while benchmark 10-year yields hit 2.279 percent, their lowest since June 2013. Benchmark 10-year U.S. Treasury notes were last up 3/32 in price to yield 2.32 percent, from a yield of 2.33 percent late Wednesday. U.S. 30-year Treasury bonds were last up 3/32 to yield 3.06 percent, little changed from late Wednesday.