#AceMarketsNews – NEW YORK: Aug.31: World stock indexes fell on Monday amid persistent investor concerns about slowing growth in China and the prospect of higher U.S. interest rates, while oil prices rallied.
U.S. stocks were on track for their worst monthly drop in over three years after being pummeled in the past two weeks.
U.S. crude oil futures jumped 8.8 percent, rebounding from early losses. Data showed contracting U.S. production and OPEC willingness to talk with other producers about falling prices.
Weekend comments from Federal Reserve policymakers left the door open to a U.S. rate rise as soon as next month.
Fed Vice Chairman Stanley Fischer said in a speech at the annual Jackson Hole, Wyoming, central bankers’ symposium that U.S. inflation was likely to rebound, allowing rates to rise gradually.
“We can still expect to see some significant drops in the market until we get some direction from the Fed regarding a rate increase,” said John DeClue, chief investment officer of U.S. Bank Wealth Management.
The Dow Jones industrial average fell 118.86 points, or 0.71 percent, to 16,524.15, the S&P 500 lost 16.45 points, or 0.83 percent, to 1,972.42 and the Nasdaq Composite dropped 51.78 points, or 1.07 percent, to 4,776.54.
The dollar eased as weaker stock markets prompted investors to trim bets against currencies popularly used to fund risky carry trades.
But Fischer’s comments limited the dollar’s losses. The U.S. dollar index, which measures the greenback against a basket of currencies, was down 0.1 percent.
MSCI’s all-country stock index lost 0.6 percent, while the pan-European FTSEurofirst 300 stocks index closed down 0.2 percent and registered a monthly loss of 9 percent – its worst monthly performance since August 2011.
Chinese shares had another volatile session. The CSI300 index ended up 0.7 percent, after falling 4 percent at one point. The index was still down 11.8 percent for August.
Oil rose further after its biggest two-day rally in six years last week.
Brent October crude climbed 8.2 percent to settle at $54.15 a barrel, while U.S. October crude gained 8.8 percent to settle at $49.20 a barrel.
U.S. domestic crude oil production peaked at just above 9.6 million barrels per day in April before falling by more than 300,000 bpd over the following two months, Energy Information Administration data showed on Monday.
U.S. safe-haven Treasuries prices rose on continued concerns over China and emerging market economies, while month-end buying gave longer-dated Treasuries prices a boost.
U.S. 30-year Treasuries were last up 2/32 in price to yield 2.91 percent. Benchmark 10-year Treasuries were last up 3/32 in price to yield 2.17 percent, from a yield of 2.18 percent late Friday.
(Additional reporting by Robert Gibbons in New York, and Tanya Agrawal, Nigel Stephenson and Anirban Nag; Editing by James Dalgleish, Dan Grebler and Lisa Shumaker)
Ace Worldwide News