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Fears of US slowdown weigh on stocks, bonds rally

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Reuters
Reuters
Reuters is an international news organisation owned by Thomson Reuters

NEW YORK: Weak economic data in the United States and Europe weighed on global stock benchmarks on Tuesday, sending investors into safe-haven assets.

European stocks fizzled after eurozone manufacturing data showed the sharpest contraction in almost seven years. US stocks and the dollar dropped sharply on data showing manufacturing contracted to a 10-year low in September, adding to fears of a slowdown in the world’s largest economy as a result of the trade war with China.

“The PMIs across the globe have continued to deteriorate and obviously we are in line with that deterioration. It’s all due to the trade war,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

On Wall Street, the Dow Jones Industrial Average .DJI fell 244.36 points, or 0.91%, to 26,672.47, the S&P 500 .SPX lost 23.68 points, or 0.80%, to 2,953.06 and the Nasdaq Composite .IXIC dropped 48.13 points, or 0.6%, to 7,951.21. Each index had posted modest gains in earlier trading.

MSCI’s gauge of stocks across the globe .MIWD00000PUS shed 0.58%.

China and the United States are to resume trade talks next week in Washington.

The World Trade Organization cut its forecast for growth in global trade this year by more than half on Tuesday and said further rounds of tariffs and retaliation, a slowing economy and a disorderly Brexit could squeeze it even more.

Oil prices slipped after the weak U.S. data was released, with U.S. crude CLcv1 down 0.7% to $58.84 a barrel and Brent LCOc1 down 1.1% to $53.47.

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