#AceMarketsNews – Sept.24: Stocks around the world fell for a fifth day on Thursday, sliding towards two-year lows, as worries lingered over global economic growth and the scandal over Volkswagen’s emissions test-cheating rattled Europe’s carmakers.
Government bond prices rose on safety bids, while the dollar fell against the euro but jumped to a 13-year high against the Norwegian crown after a surprising cut in the oil producer’s interest rates.
Wall Street equity indexes fell in trading clouded by concerns about global growth and ahead of a speech later Thursday by Federal Reserve Chair Janet Yellen that comes a week after the U.S. central bank shook markets by keeping in place near-zero interest rates.
The Dow Jones industrial average fell 104.46 points, or 0.64 percent, to 16,175.43, the S&P 500 lost 10.54 points, or 0.54 percent, to 1,928.22 and the Nasdaq Composite dropped 34.36 points, or 0.72 percent, to 4,718.38.
Shares of Caterpillar fell as much as 8 percent to a five-year low of $64.65. The company slashed its revenue forecast for 2015 by $1 billion and said it could cut up to 10,000 jobs through 2018 amid a downturn in mining and energy industries.
Tokyo’s Nikkei closed down 2.8 percent as Japan returned from an extended break, setting a gloomy tone in Asia and Europe’s bourses.
EMISSIONS TEST SCANDAL
Shares of Volkswagen, which had been battered on news it cheated on diesel-emissions tests, clawed back 0.6 percent after some reassuring German and French sentiment data.[.EU]
However, the scandal threatened to widen to VW’s rivals, and share prices of BMW, Renault, Fiat and Daimler all ended lower. [.EU]
Those declines dragged London’s FTSE down 1.2 percent and Frankfurt’s DAX and the Paris CAC 40 indices by nearly 2 percent, to leave MSCI’s 45-country All World index off 0.9 percent and with a fifth day of losses.
Prices for U.S. Treasuries and German Bunds were driven up by investor concerns over possibly slowing global economic growth and the stocks selloff.
Benchmark 10-year Treasuries notes rose 14/32 in price for a yield of 2.098 percent, down nearly 5 basis points from late on Wednesday. The 10-year yield touched its lowest level in four weeks at 2.081 percent. [GVD/EUR] [US/]
Norway’s crown slumped 2 percent after its central bank unexpectedly cut interest rates.
The euro added to gains it had made on Wednesday, when European Central Bank chief Mario Draghi appeared to suggest a fresh round of money printing wasn’t as close as many analysts had thought.
The euro was last up 0.50 percent at $1.124.
Oil prices were under pressure from the equities slump but seesawed were last up slightly.
Platinum which has been hammered by the VW scandal because it used in catalytic converters to clean exhaust emissions, also rebounded having hit its lowest level in more than 6-1/2 years.
Emerging market currencies remained under heavy fire too.
The Brazilian real at one point sank to a new all-time low of 4.2482 per dollar, clobbered by a recession, fiscal deficit and political instability following corruption allegations against leading politicians in the world’s seventh-largest economy. [EMRG/FRX]
(Editing by Bernadette Baum and Nick Zieminski)
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